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Analyst: Drought is starting to impact cow numbers

A livestock market analyst says drought in some of the country’s major cattle producing regions is impacting his outlook for the rest of 2018—and maybe beyond.

Rabobank’s Don Close points out that more than half of the nation’s beef cows are currently located in some area of drought stress, “and 34 percent of our beef cows reside in states with either extreme or extraordinary drought conditions–so our risk of seeing some level of drought liquidation of beef cows, before the summer is over with, is very high.”

Close says some liquidation may already be happening, with weekly beef cow slaughter running as much as ten percent above a year ago. And he says it could be bringing the expansion phase of the cattle cycle to an early end.

“With the percentage of heifers in the fed slaughter mix, and the escalation of cow slaughter that were talking about, that’s really putting into question if we’re expanding at all—and, very arguably, we could already be seeing some very modest level of liquidation of females.”

Northern Missouri is one the cattle producing regions experiencing drought conditions. According to University of Missouri Extension specialist Zac Erwin, hot, dry weather with short grass growth slowed the bidding at the recent spring sale of Show-Me-Select replacement heifers in northeastern Missouri. Erwin said It’s not the market but the feed supply that reflects bidder worries.

AUDIO: Don Close