Texas cattle country lost some 600,000 head this year -- a 12-percent reduction in the herd -- driven by a drought that withered grasses and baked river beds and stock ponds. It's the kind of en masse decline the likes of which this state hasn't seen since drought ravaged the Southern Plains during the Great Depression, A&M livestock economist Dr. David Anderson tells Unfair Park.
No one is sure how long the record drought will persist. La Niña, a pattern of unusually cool ocean temperatures associated with drought, has settled in once again, meaning Texas could be looking at another two to three dry years, maybe more, state climatologist Dr. John Nielsen-Gammon says in his briefing for the state Legislature.
Hundreds of thousands were sold on the market this year, and an unknown number were shipped to states like North Dakota and Wyoming, where grass still grows, Anderson says. As a result, the price of that burger is going to go up when depleted ranches send fewer cattle to market. "It also does mean, since most of our calves are sold through auction markets, there will be less volume through auction markets, less business activity for auction markets and for the people who truck those cattle to where they're going," he says. The reverberation, in other words, will be widespread.
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In an unexpected quirk, Anderson noted that demand for steak is high, meaning the American diner may be in a prime-cut mood, emerging from the hamburger days of the recession. So expect the price of a beautifully marbled rib-eye to shoot up, since there will be fewer cows to birth the calves that eventually become the steaks and briskets, Anderson predicted.
The market was glutted this year, but unlike the drought of record in the '50s, beef prices have been buoyed by demand. It is perhaps the sole silver lining for cattlemen like Jack Loftin, an octogenarian rancher in Archer County (who was featured in a September cover story on ranchers in drought) and who has sold off much of his herd and been supplementing what he has left with bought feed.
It cuts both ways, though. When times get wetter -- and Nielsen-Gammon predicts they will, they have to -- the same high prices that have rescued the industry from freefall will make it expensive, maybe even prohibitively so, to buy replacement heifers to restock the herd. Buying back will depend, Anderson says, on how much debt the rancher accumulates to see his herd through the drought -- provided it ends sometime soon.
A record sell-off is a big reason to worry. But Texas cattle-raising primacy will remain unchallenged. "It's a big decline. It's a big number," he says. "I think it's gonna be the largest on record. But it still means we're gonna be the largest cattle-producing state in the U.S."