Drought and Economic Headwinds Stall U.S. Cattle Herd Recovery

Despite record-high calf prices and robust demand that would ordinarily incentivize expansion, the size of the US cattle herd is not increasing and the leather and hide sector is feeling the downstream effects. Severe drought across the Central Plains and other key cattle-producing regions has degraded pasture conditions, reduced forage availability and pushed producers to sell cattle rather than retain them for breeding.

Texas A&M livestock economist David Anderson warns that the consequences of the current drought will be long-lasting. Even if weather conditions improve in the coming months, rebuilding the national cattle herd will take years due to biological constraints and heightened producer risk aversion.

For LHCA members, the tight cattle supply translates to continued pressure on hide availability and elevated raw material costs. The association will continue to monitor herd dynamics and keep members informed of developments that affect supply chain planning.