America’s beef cattle herds have fallen to their lowest levels in more than 70 years.
As America’s ranchers struggle to earn a living, domestic cattle herds are shrinking to the lowest numbers in 70 years and cattle farmers are exiting the business by the tens of thousands each year, leaving the United States ever more dependent on imports, agriculture analysts say.
A new report from the Federal Reserve Bank of Kansas City highlights the plight of cattle farmers, stating that higher interest rates are now putting many of them into the red.
And ranchers say that escalating loan expenses are just one of several factors driving them to sell off their herds, which may herald even higher beef prices for consumers in the years to come.
“It’s hard to trust this thing, keeping herds or buying more,” Kansas rancher Kyle Hemmert told The Epoch Times. Rather than borrow to invest in new herds, he said, many ranchers are opting to simply sell off their cattle.
While cattle prices are currently at nominal highs for farmers, prices were also high in 2014, spurring many ranchers to borrow money and expand their herds in expectation of profitable years to come.
What happened next, however, was a flood of imports from Mexico and Brazil that hit the market starting in 2015, driving down prices and putting many American farmers into the red, according to a report by Ohio State University.
Ranchers talk of that time, selling into an oversaturated market with prices plummeting, as “trying to catch a falling knife.”
With cattle prices now rising again, agriculture economists say that, according to what is known as the cattle cycle, farmers would typically invest in expanding their herds at this point.
But instead, many ranchers are liquidating their herds and thousands are leaving the business altogether.
“They’re liquidating because, one, long-term lack of profitability; two, widespread drought; and three, lending institutions just refusing to carry them any further because of the long history of depressed prices and losses,” Bill Bullard, CEO of R-CALF, told The Epoch Times. R-CALF is an organization of cattle farmers that calls itself “the national voice for independent cow-calf producers and feeders across America.”
