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Texas drought shrinks state cow herd

December 17, 2011 |  9:28 am

Cattle
Blame the long-running drought in Texas for the largest single-year decline in the state's cow herd, which experts say is likley to drive up beef prices.

Since January of last year, the number of cows in Texas is expected to have decreased by about 600,000 -- a 12% drop from about 5 million cows at the beginning of the year. That's according to David Anderson, a livestock economist in College Station who monitors beef markets for the Texas AgriLife Extension Service.

The trend is likely the largest drop in the number of cows any state has ever seen, Anderson told The Times. Texas only had a larger percentage decline during the Great Depression.

"Every cow they sold this year isn't going to be around to have a calf next year," Anderson said. "It means a smaller industry next year and probably the year after."

Anderson said many cows were temporarily moved to greener pastures out of state, but many others were sold and slaughtered. He said that in Texas, Oklahoma, New Mexico, Louisiana and Arkansas, 20% more cows were slaughtered than last year, about 200,000.

That extra supply could help meet increased beef demand from China and other countries, but will mean fewer calves in the near future, driving up beef prices domestically over time, he said.

Anderson said beef production nationally is expected to decline 4% next year.

The U.S. Department of Agriculture estimates beef prices will increase up to 5.5% next year, partly due to the decreased cattle supply. That follows a 9% increase in beef prices in this year.

Texas ranchers say they were forced to sell cattle, slaughter them or send them to leased land this year as the drought withered pastures and drove up the price of hay and feed.

The state received less than half its normal rainfall of about 26 inches through November. The latest U.S. Drought Monitor shows nearly 70% of Texas is still experiencing the two worst levels of drought conditions.

The epic Texas drought has caused an estimated $5.2 billion in losses to farmers and livestock producers, experts say, and the figure is expected to rise this winter.

Earlier this year, Dennis Braden, general manager at Swenson Land & Cattle Co. Inc. in the West Texas town of Stamford, sent most of their herd north to leased land in Nebraska and Wyoming.

“Normally in a drought what you would do, the situation we’ve been in, you would sell your cows and sit on the sideline,” Braden told The Times on Friday. “The reason we’re out the expense of moving cattle to Nebraska is, pre-drought, the cattle inventory numbers were already at 1971 levels.”

He said the cow supply has now reached record lows across Texas cattle country. Some ranches are even shipping cows overseas, he said.

“Our supply is way below our demand. Russia and some of the Third World countries coming into modernized conditions, we’ve got a lot of breeding cows going in that direction," he said, adding that cows are going to Romania and shipments are expected to China.

Braden is optimistic that the drought will end, and when it does, those still holding onto cattle will be sitting pretty, he said.

“When people start looking for cows to put on these ranches, that’s just going to create a bigger demand,” Braden said. “There’s no telling what these cows and calves are going to be worth once Texas greens back up.”

So far, he has lost a half dozen cattle on the land he leased this winter. But he says he made the right decision sending them north. Many gained about 100 pounds, he said, more than they would have in parched West Texas.

“We got our cow herd together,” he said.

Anderson said it was not clear how many of the cows shipped north will be brought back to Texas.

"Much of that depends on the drought," he said, adding that recent rains have not been significant enough to bring the cows home. "It really depends on the rainfall and the pasture conditions. I expect the people that did move the cows, it was worth it -- the transporation costs were high, but those areas to the north did have good pasture conditions, the animals gained weight and calf prices have been high, historically high."

Nationally, the number of cows has dropped by an estimated 617,000 this year, a 2% decline from the 30.9 million animals last year.

Anderson said it's unclear whether the expected increase in beef prices will hurt U.S. exports in the future. The U.S. is the world's third-largest consumer of beef per capita at 85.5 pounds per year.

"We'll end up with higher prices than what we expected to see because the drought was something that was unanticipated," he said.

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Photo: Monty Jones, 54, and son Stony Jones, 33, herd cattle up a chute in October as Cow Boss Mark Voss sprays them with dewormer and loads them onto a truck to be shipped from Swenson ranches near Stamford, Texas, to Nebraska and Wyoming. Credit: Molly Hennessy-Fiske/Los Angelels Times.

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