By Tyler Durden | 1 February 2022
ZERO HEDGE — A severe drought grips the Western U.S. has caused an unexpected plunge in the cattle herd, indicating ‘meatflation’ will be sticking around this year as consumers pay near record-high beef prices.
U.S. Department of Agriculture’s (USDA) biannual cattle inventory report for the second half of 2021 shows that the U.S. herd fell 2% a year ago. Bloomberg’s survey estimated a 1% decline.
“Plains squeezed supplies of hay and feed for cattle, prompting some ranchers to sell to slaughterhouses animals usually held for breeding. Now, deepening drought in the southern part of the Plains — where most cattle in the U.S. are raised — could force another round of herd reductions later this year,” Bloomberg said.
Derrell Peel, an extension livestock marketing specialist at Oklahoma State University, warned a “drought is looming large.”
“The cycle we are in right now is a liquidation phase,” Peel said. He means that worsening drought conditions will likely lead to more herd reductions. […]