Source:  Rita Jane Gabbett, MEATINGPLACE, 6/14/11

Deteriorating pasture conditions in the big cattle states of Texas and Oklahoma combined with soaring corn prices are causing analysts to predict further U.S. beef cow herd liquidation this year.

USDA estimated that 81 percent of Texas pastures and 39 percent of Oklahoma pastures were in poor or very poor condition in the week ended June 12. These two states produce nearly a quarter of U.S. beef cattle, according to the CME Group’s Daily Livestock Report.

At the same time, corn prices at around $7.70 per bushel, are up 129 percent from a year ago.
“We are already starting to see evidence that this lethal combination is impacting producers that up to this point have been trying to hold on to their herds,” wrote livestock analysts Steve Meyer and Len Steiner in the DLR.

They also pointed out that beef cow slaughter is 11.4 percent higher than a year ago in region 6, which includes Arkansas, Louisiana, New Mexico, Oklahoma and Texas. So far, however, that increase has been offset by lower slaughter levels in the Midwest and Northern states.

Still, the analysts predicted that by Jan. 1, 2012 U.S. cattle inventories could slip below 30.4 million head, compared to 30.865 million on Jan. 1 2011, which already represented a 40-year low.  

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