Why the U.S. cattle herd is at a 75-year low and what it means for beef prices

U.S. beef demand remains strong even as retail prices rise. The U.S. cattle herd, including beef and dairy cattle, is at its smallest level in three-quarters of a century, with 86.2 million head reported by USDA data for the first day of the year. Multiple factors are reducing livestock numbers, including higher operating costs, drought, international competition, and increased consolidation in the cattle industry. Fewer farmers and ranchers are maintaining cattle, and producers have been selling livestock at record-high prices while delaying purchases needed to rebuild herds. Beef production remains strong because cattle are larger, but raising cattle is becoming more expensive. Rising costs for fuel, equipment parts, fertilizer, and animals increase financial pressure on producers.

"Domestic producers had 86.2 million head of cattle on the first day of this year, according to U.S. Department of Agriculture (USDA) data, the lowest number since 1951. A number of factors have been pushing livestock numbers down, including rising costs, drought, international competition and increased consolidation in the cattle industry. Now, there are fewer American farmers and ranchers than there were even a few years ago, according to Bill Bullard, CEO of the cattle and sheep producers group R-CALF USA."

""We have likewise lost the cows that they once maintained," he said. "So we have seen our herd shrink at an alarming rate for the past several decades." The record-high prices paid for cattle lately have also prompted many producers to sell their livestock and have dissuaded them from buying new animals to rebuild their herds, further diminishing the overall domestic cattle supply."

"U.S. beef production has remained strong, though, because even though the herd size has shrunk in recent decades, cattle themselves have grown. Raising cattle like buying beef is getting more expensive Farmers and ranchers say expenses such as those for diesel fuel, equipment parts, fertilizer and even the animals themselves are all up."

"Operators who have to take out loans to buy cattle or fund infrastructure improvements are facing higher costs and have to decide how much debt they're willing to tolerate in a volatile livestock market. Amanda Hall, who lives in Lexington, Ky., on a farm with her husband"

Read at www.npr.org