U.S. Cattle Herds Shrink; Beef Prices To Stay High

The American cattle herd shrank more than expected to the lowest seasonal levels since 2014, an indication that beef prices will remain high for at least another couple of years, Gerson Freitas Jr. reported for Bloomberg.

Photo Insert: Tight supplies of cattle in the US have hurt profits of meatpackers including Tyson Foods Inc. and JBS SA, both of which are set to report earnings in August.

There were 95.9 million cattle as of July 1, down 2.7% from a year ago, the US Department of Agriculture (USDA) said Friday in its biannual cattle-inventory report Friday.

Analysts surveyed by Bloomberg expected a 2.3% decline. Years of drought, high feed costs, and relatively low cattle prices have forced ranchers in the US to send cows to slaughter over the past few years, leading to a steep reduction in the size of their herds.

While a recent spike in cattle prices to record levels is expected to encourage farmers to retain more heifers for breeding this fall, it will be at least another two years until more cattle are widely available for beef production.

Tight supplies of cattle in the US have hurt profits of meatpackers including Tyson Foods Inc. and JBS SA, both of which are set to report earnings in August.

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