That means high beef prices are likely to keep rising, officials say.
(Des Moines Register) The combination of drought and heat in the Southwest accelerated what was already a tight supply of cattle in the U.S. last year, dropping the total herd to 90.8 million animals, the lowest total since 1952, the U.S. Department of Agriculture said Friday.
The latest number means a continuation of a trend that caused supermarket beef prices to rise by 11.5 percent last year, according to the U.S. Department of Labor.
Consumers most likely will continue to see high beef prices through the summer grilling season, said Kevin Penner, cattle trader at Ag Trader Talk in Des Moines. “The report was about what the trade expected,” he said.
The price of ground beef was up 23 percent last year, with the more expensive choice cuts rising less, according to government figures.
The price of choice boneless roast was up 12 percent, but choice sirloin steak was up just 1 percent in price as retailers protected their most profitable beef item. McDonald’s raised its retail prices twice during 2011.
Iowa maintained its 3.9 million-cattle herd, the nation’s fifth-largest total. But of the states ahead of Iowa, only Nebraska was able to raise its herd totals, from 6.2 million animals to 6.45 million.
Texas, at the epicenter of the drought, lost 1.4 million animals, to 11.9 million. Oklahoma saw its total herd drop 600,000 animals, to 4.5 million, and Kansas lost 200,000 head, to 6.1 million.
Over the last several years, cattle producers have reacted to flat domestic demand for beef and high feed costs by restricting the enlargement of herds.
At the same time, export demand rose by 30 percent in 2011, with Asian countries such as Japan and South Korea leading the surge in purchases of U.S. beef. China made a large purchase of U.S. beef in the last days of 2011.
Cattle prices rose by more than 25 percent in the last year. On Friday slaughter-ready cattle closed up 15 cents per hundredweight to $124.70. Younger feeder cattle were up 98 cents per hundredweight to $154.60.
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