By Robert Pore
robert.pore@theindependent.com

According to the USDA, there were 338,000 fewer beef cows in the U.S. at the end of 2007 than at the end of 2006, meaning herd liquidation has occurred in 10 of the last 12 years.

A year earlier, the USDA reported a drop of 103,000 cows during 2006. The 2007 beef calf crop was the smallest in the U.S. in 56 years.

"The USDA report is an indicator of U.S. beef production for the next two to three years," AFBF livestock economist Jim Sartwelle said.

Sartwelle said the decline in U.S. beef cow numbers is no great surprise, given the extent of the drought in several southeastern states, increasing expenses and other developments in the beef processing sector.

"We can draw some fairly stark conclusions about the size, shape and location of the U.S. beef cow herd heading into an increasingly volatile era with ever-increasing costs of production," Sartwelle said.

Severe drought in the Southeast forced the liquidation of herds across the region. The states of Tennessee, Kentucky, Alabama and Georgia accounted for 54 percent of the nation's beef cow herd reduction.

The beef industry also faces some sobering economic and structural realities, Sartwelle said. He said high feed and nonfeed input costs, skyrocketing land values and slowly recovering beef exports are all at play.

Regarding excess capacity in the feeding and processing sectors, Sartwelle said those parts of the U.S. beef industry were built when total cattle and calf numbers exceeded 130 million head, dwarfing today's 96.7 million head.

The USDA reported a 207,000-head drop in heifers kept for beef cow replacement. Of that total, nearly 150,000 head are older replacement heifers expected to calve during 2008. Sartwelle said a relatively strong market for feeder heifers through much of 2007 and the lack of forage in many areas are the chief reasons for these decreases.

"We're not going to have a big calf crop during 2008, and we're not likely to build cow numbers significantly this year, either," Sartwelle said. "We're just not likely to exit 2008 with a larger herd than what we started this year with."

U.S. beef producers began this year with 16 percent fewer beef cows than in 1978, Sartwelle said, but beef production per cow has increased by 30 percent during that time.

"Flat-to-declining inventories place greater emphasis than ever on the development and adoption of cost-effective reproductive, health and nutritional practices and technologies for this sector to produce enough beef for our consumers here and abroad," he said.

With cattle numbers down, per capita consumption of beef will decline by nearly five pounds over the next 10 years, according to USDA's Agricultural Long-Term Projections to 2017, published last week.

The report said USDA projected that per capita beef consumption, which was 65 pounds in 2007, will decrease year by year until 2017, when it will be 60.1 pounds. Meanwhile, per capita consumption of pork (50.5 pounds in 2007) will dip to 48.8 pounds, and per capita consumption of broilers (85.4 pounds in 2007) will grow to 88.1 pounds.

The net decrease for all three proteins would be 2.9 pounds, reflecting production adjustments to higher feed costs as well as rising exports across species, the report said.