US beef herd shrinks as drought bites

Updated at 10:45 pm on 30 November 2012

Feeding cattle on grass - in a pastoral system simlar to New Zealand's - could be the future for many American beef farmers.

The country that is synonymous with steaks as big as Texas is suffering a serious shortage of cattle, the BBC reports.

The US national herd is now at an alltime low. Numbers peaked at 132 million head of cattle in 1975. At the start of this year this was down to just under 91 million.

Across the US, cattle are sometimes housed in feedlots to be fattened for slaughter. These huge operations on average contain around 3000 animals have also suffered a significant drop in numbers, down around 12.5% on last year.

So what is going on?

There are long term factors in terms of profitability and rising costs but what's really pushing the decline right now is a potent mix of environmental issues and politics.

Desperate drought

The US has been suffering a desperate drought that has affected around 80% of the agricultural land across the country. It has been so severe that in certain parts, farmers have been forced to get rid of their cattle as they simply don't have any pasture for them to graze on.

The drought has also affected the yields of grain crops, which are estimated to be down around 13% on last year. And because US farmers depend on grain to fatten their beef herds, this has increased pressure to get rid of cattle.

Adding further complication is the politics. The US Environmental Protection Agency (EPA) has had a mandate in place since 2005 that requires a certain percentage of US liquid fuel comes from renewable sources.

In practice this means blending ethanol made from grain with regular gasoline. This year, as the drought persisted, desperate farmers asked the EPA to set the mandate aside to help cut corn prices.

They refused and this year ethanol production will consume a whopping 42% of the corn crop, says the US Department of Agriculture.

Dr Stan Bevers from Texas A&M University say the US beef industry was built on abundant corn supplies, so the cattle industry must adjust and get smaller."

According to Dr Derrell Peel, from the University of Oklahoma the current problems could have long term impacts on US beef. He thinks it is likely there will be changes in how cattle are fed. Less grain, more grass, and lighter cattle.

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