Agriculture • Fears for US dryness spread to livestock industry
Fears for US dryness spread to livestock industry
Concerns about the impact of US dryness on crops have spread to livestock, with a warning that, with pasture conditions deteriorating, there is "plenty of room for worry" among cattle ranchers.
One of the major drivers in Chicago feeder cattle futures to record a high, on a spot lot basis, close to 160 cents a pound has been the switch to buying by southern US ranchers, who last year sold-down herds as a long-running drought dried up paddocks.
The proportion of Texas pasture rated "good" or "excellent" by the US Department of Agriculture stood at 27% as of Sunday, up from 9% in early June last year, and in Oklahoma at 50%, compared with 29% a year before.
Ranchers’ increasing willingness to rebuild herds is also evident in a reduced slaughter rate, which fell 16.5% last month, with a particular drop in beef cow liquidation in the south, a sign of producers keeping hold of breeding stock.
However, the improvement in southern grass condition, even to relatively weak levels in Texas, has not been mirrored elsewhere, with pastures nationwide rated 47% in good or excellent health, down from 53% a year before.
Missouri now shows as one of the states with the worst pasture condition, of 28%, compared with 64% a year ago.
"Pasture conditions are worse than a year ago and the 10-year average despite a significant improvement in the situation in Texas and Oklahoma," a report by Paragon Economics and Steiner Consulting said.
"The dividends of a warm winter and improved moisture conditions have largely been had," the briefing said, adding that the question now was whether dryness would force a revival in cow slaughter rates.
"Some early indications show that despite improvements in areas hit by drought last year, there is plenty of room for worry."
The comments come amid broader concerns over dryness in the Midwest which have led many analysts to question US Department of Agriculture forecasts for a record corn yield, of 166 bushels per acre, although USDA chief economist Joseph Glauber on Thursday urged caution over reduced estimates.
Official data on Tuesday rated more than half the Midwest as suffering abormally dry or drought conditions, compared with 1.2% a year before, besides 71% of the High Plains, up from 21%.
"A number of areas in the Midwest have experienced below-normal precipitation in the last month, negatively affecting pastures," Paragon and Steiner said.
In the South 85% was still unusually dry, although the severity of the moisture shortages were generally lower than a year before.
"If current conditions continue, then we will likely see more pressure around the country. Herd rebuilding will have to wait for another year."
Statistics: Posted by yoda — Mon Jun 11, 2012 5:39 am
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