U.S. cattle numbers continue to shrink and Texas is no exception as the Lone Star State has experienced a 22 percent decline over the past three years, according to a Texas A&M AgriLife Extension Service livestock specialist.

“Continued drought in 2012 took another year’s toll on the nation’s cowherd, according to the latest U.S. Department of Agriculture inventory report,” said Dr. David Anderson. “USDA reported that the U.S. had the smallest cattle herd since 1952. The 89.3 million cattle in the U.S. on Jan. 1 was 1.4 million fewer than last year.”

Drought caused the Texas herd to shrink again as the state has the fewest cattle since the 1950s.

“Just over 4 million beef cows were reported in Texas on Jan. 1,” he said. “Texas has lost over 1 million beef cows in the last three years, representing a 22 percent decline in cow numbers. Ranchers across the U.S. and Texas reported that they held more young females, or heifers, to begin to replace the cows lost. Nationwide, 2 percent more heifers were kept compared to the year before.”

In Texas, heifer retention was up approximately 9 percent. Calf prices have been at levels to encourage keeping more heifers, yet those expansion efforts have been difficult due to dry or drought conditions both nationally and in Texas, Anderson said.

“But, even though more heifers were kept, they were not enough to offset the number of cows lost. Most of Texas continues to be in drought and the current drought stretches from South Texas to North Dakota,” Anderson said. “When we start thinking about rebuilding we have to have our pastures and range in recovery.”

Overall, it’s the smallest cattle herd in the U.S. in 60 years.

“Where are we headed in 2013? I think again we will contend with tighter supplies of cattle, high feed costs, but hopefully, drought recovery to go with it.”

Anderson expects tight supplies of calves and for prices to remain high for 2013.

“I think that will be due to tighter supplies of cattle and the potential is there for a possible record high corn crop if we get the rain in the Midwest.”

Meanwhile, consumer demand for beef will be an area of interest. Per capita beef consumption is declining, mostly due to declining beef production and strong beef exports. But even though consumers are eating less beef, on average, they have been paying record high retail beef prices.

As a consequence, demand has the potential to grow slowly as a result of high beef prices and overall slow growth with regards to the general economy.

“We’ll see slow demand growth as we slowly grow incomes,” he said. “In the meantime, beef will face tough competition from pork and poultry supplies.”