Thursday, December 06, 2012

Beef industry migrating to drier places as pasture land is converted to more lucrative crops

More beef cattle will be located in drier regions of the country in the future because they are becoming less numerous in regions where land use is increasingly shifting from pasture to crops, a livestock marketing specialist says. The increased demand for corn that starting in 2006 culminated in this summer's drought, during which prices rose sharply. Derrell Peel of Oklahoma State University says higher demand has led to "intense competition among crops for land resources."

The "epicenter of this crop frenzy" is in the Midwest, reflected by the jump in land values in the region, Peel writes. He acknowledges that data are limited, but says there are long-term impacts of this type of land use, and there are "strong indications" that they have already started and will have a major impact on the beef industry. There are 171 million acres of pasture and hay land that are arable, according to the 2007 National Resources Inventory. Peel says that converting those acres to cropland isn't easy or quick, but high crop prices "will logically attract some of these acres for cultivated crop production over time."

Changes in cattle inventories lead Peel to believe that the expected trend has begun. The U.S. beef cattle herd has decreased by 2.8 million head, or 8.5 percent, since 2007. The decrease is more pronounced in the Midwest and surrounding states, including Illinois, Indiana, Iowa, Minnesota, Missouri, Kentucky and Tennessee, Peel writes. Twelve Great Plains and Rocky Mountain states experienced increases or very small decreases, from 5 percent increase to 7.5 percent decrease. Those figures "indicate that the beef cow herd is decreasing more rapidly in regions where competition with crops is greater," Peel writes.

Some areas are more suitable for herd rebuilding than others, making some producers see less potential on their land than elsewhere, Peel says. But he adds, "There is little doubt that some of the most productive pasture and hay land is being converted for crop production," highlighting the need for land  use to be more efficiently managed, he says. (Read more)

No comments: