The U.S. beef herd has been shrinking and the worst drought in decades has only encouraged that trend to continue. The USDA's midyear cattle inventory report showed beef cow numbers dropped by 3 percent in the last year. It projects the 2012 calf crop to be down 2 percent from last year and down 8 percent since 2006.

Part of what has been driving the decline is skyrocketing feed costs and prolonged drought in the Southern Plains, said Chris Hurt, Purdue Extension agricultural economist.

"This year's drought likely means further decreases in cow numbers over the next 12-14 months. The impacts of the drought are just beginning to show up in some of the national data. We do know the direction, but not the final magnitude."

Since mid-June, corn prices have jumped by 60 percent and soybean meal prices by 25 percent.

According to the USDA, 82-92 percent of the pastures in Indiana, Illinois, Arkansas, Missouri, Iowa, Kansas, Nebraska and Colorado are in very poor or poor condition.


The livestock industry will experience a lot of short-term pain as it tries to adjust for the lack of available feed crops and forages, said Scott Brown, research assistant professor in the University of Missouri College of Agriculture, Food and Natural Resources.

Some producers will have to exit the industry, he said. Producers are already culling and slaughtering their existing animal inventories to a level they can afford to feed.

The impact on producers and consumers will become worse if the drought continues into 2013. “I don’t know what to think about what will happen then to the domestic livestock industries,” said Brown. PD

—Compiled from Purdue University and University of Missouri Extension news releases