An uptick in drought and other extreme weather events has beef farmers in the U.S. and Canada thinning their herds in near-record numbers, which could lead to supply problems in the beef industry over the longer term, industry experts say.
Farmers will increasingly struggle with profitability amid the unpredictable seasons as climate change makes drought, flooding and wildfires more common, they say.
For the past few years, dry conditions and droughts in both countries have prompted farmers to reduce their herd sizes by sending more cattle to slaughter, which has resulted in increased production of beef products, said Desmond Sobool, principal economist with Farm Credit Canada.
He said while this would normally drive cattle prices down, inflation and high demand mean prices are remaining elevated — and if there’s less supply in the future, that will drive prices up further, which could affect consumer prices as well.
First there was a drought in Canada in 2021, which meant pastures were reduced and farmers had to buy more expensive feed from the U.S., sending costs higher, said Sobool.
That year, Canadian farmers sold thousands of extra cattle in the fall to make up for a shortage in feed due to the impacts of extreme weather, said Stuart Smyth, associate professor in the College of Agriculture and Bioresources at the University of Saskatchewan.
“People just had to take a huge hit that year,” he said.
The spring of 2022 was dry, in some areas just as bad as 2021, and farmers kept selling, Smyth said.
Now, there’s a drought in the U.S., and farmers there are facing the same problems, Sobool said.
More than two-thirds of the U.S. cattle herd is in an area affected by drought, according to the U.S. Department of Agriculture and Farm Credit Canada, leading to the largest contraction of the North American cattle herd in a decade.
In fact, U.S. farmers have contracted their herds three years in a row, for a variety of reasons including the drought, said Sobool. This has resulted in the lowest cow herd on record, he said.
While this means more beef is being produced in the short term in both Canada and the U.S., it means supply will eventually go down as herds get smaller, and farmers will send fewer cattle to slaughter while they try to rebuild their herds, he explained.
However, while it’s normal for production to fluctuate from year to year, this time something is different, said Sobool.
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