Listen to this article now

Concerns about a “meat recession” are growing as the holidays approach.

As the cattle herd continues to shrink, online meat delivery company Good Ranchers warned consumers on social media that “a meat recession is knocking and supply is about to be tight.”

“Due to droughts, the cattle herd has shrunk,” Good Ranchers wrote on Instagram. “Our total meat supply for the coming year is significantly reduced.” This is one of the primary reasons for the impending meat recession.”

According to Walter Kunisch, senior commodities strategist at Hilltop Securities, beef cattle supplies in the United States will continue to contract throughout 2023, pushing up beef prices for consumers “well into the first half of 2024.”

“We believe that an acute and prolonged drought in the southwest United States is causing increased culling of beef cattle, leaving the United States structurally short of beef cattle and beef supplies,” Kunish told FOX Business.

According to the United States Department of Agriculture (USDA), the number of cattle moved from pasture to a feedlot in September to be conditioned for slaughter decreased 4% year on year. It was as high as 11% in some areas, such as Kansas.

According to Kunish, the problem is that the drought has been lingering in key cattle producing states in the Southwest such as Kansas, Nebraska, Oklahoma, and Texas since 2021.

“Those states have been in severe drought for the better part of 2022,” he said, adding that there hasn’t been much relief.

According to data from the US Drought Monitor, areas such as Texas and the panhandle, which includes western Oklahoma and southwest Kansas, have not received significant precipitation since September 2021.

As a result, pasture availability has decreased, he added.

“Because the drought has been so long, the opportunities to graze or for ranchers to put cattle in pasture have sharply declined,” Kunisch said, forcing ranchers to put cattle into feedlots at a faster rate.

Furthermore, breeders are culling more unbred female cattle at a faster rate, effectively reducing the supply of future slaughter animals, according to Kunisch.

“Those future breeding animals have been disposed of,” he explained.

Unfortunately, even as the drought eases and pasture conditions improve, “those ranchers will begin to retain female animals for breeding, in order to increase their breeding stock.”

This means that supplies will become even more scarce as ranchers begin to rebuild their breeding herds. From the time a rancher decides to use a female for breeding to the time her offspring are ready to be slaughtered, the process takes about 19 to 24 months.

This, combined with higher commodity prices such as corn and wheat, as well as operating costs such as fuel and labor charges, is causing “persistently higher cattle prices, which can lead to higher beef prices,” according to Kunisch.


What do you think of that situation with meat recession? Please let us know in the comments.