The United States’ smallest cattle herd in 50 years will likely force feedlots out of business and possibly a packing plant or two. The 1.544M head decline in 2008 in cattle numbers is the equivalent of the annual marketings of 10 to 15 large feedlots and the throughput of the largest beef plant. Moreover, the 2008 calf crop was the smallest in 57 years. So cattle numbers will tighten into 2010 and might not increase until 2013 at the earliest, say analysts.
Even if numbers had not declined, a number of feedlots were at risk of survival because of years of over-capacity and heavy cattle feeding losses over the past 18 months. Dozens of feedlots are said to be for sale but there are no buyers in the current negative environment. Feedlots for sale don’t even have asking prices because of the lack of a market. Packers face reduced slaughter numbers in both fed and non-fed cattle. Fed steer and heifer numbers might decline by nearly 2% in 2009 vs. 2008, say analysts. Slaughter cow numbers might also decline by 2%, with more dairy but fewer beef and Canadian cows going to slaughter than in 2008.
Steve Kay is editor and publisher of Petaluma, Calif.-based Cattle Buyers Weekly. For more information, go to:www.cattlebuyersweekly.com.