Tue January 14, 2014
The Economic Impact of a Bunch of Thirsty Oklahoma Cows
Cattle is big business in Oklahoma.
In 2013, the state ranked No. 5 in total heads of beef cattle — with 4.2 million heads that represent roughly 4.7 percent of the total U.S. cattle inventory, data from the U.S. Department of Agriculture show.
But years of drought and high market prices are fueling a sell-off, and experts worry Oklahoma’s $4.5 billion cattle industry will have a hard time escaping the spiral. The Journal Record‘s Brian Brus explains:
In the face of limited water and grazing resources over the last three years, ranchers have been selling off their herds rather than try to support thirsty, hungry stock. High market prices continue to siphon beef into the market, shrinking the state’s collective herd even more. Every calf or cow sold early in its life cycle means fewer adult cattle for breeding and lower beef production per head.
Peel and others have repeatedly warned producers that the spiral will grow tighter until it is unsustainable. And they continue to be surprised at how long it has lasted. Normally such rises last about 10 years before they slow down and reverse, following the foundational rule of supply and demand.
But there are some “counterforces” that could drive down the higher prices, the paper reports:
For example, Texas A&M Extension economists said at the recent Central Texas Cow-Calf Clinic that the biggest pressure will be sufficient feed – this year’s U.S. corn crop will need to produce record yields.