USDA’s National Agricultural Statistics Service reports the January 1 Cattle Inventory is down two-percent.  All cattle and calves in the United States totaled 90.8-million head. This is the lowest January 1 inventory since the 88.1-million on hand in 1952. All cows and heifers that have calved were down two-percent, beef cows were down three-percent and milk cows were up one-percent. The 2011 calf crop was estimated at 35.3-million head – down one-percent from 2010.  This is the smallest calf crop since 1950.

Jim Robb – Director of at the Livestock Marketing Information Center in Denver – says the record Texas drought certainly was the game changer.  As feedstuffs were at record-high costs – the herd on a national basis declined. Akshay Jagdale – a New York-based analyst at KeyBanc Capital Markets – says beef processors may have to adjust plant capacity as cattle supplies shrink. He says higher beef prices will boost revenue enough to make up for the rise in costs from shrinking supplies.

Courtesy: NAFB News