A multi-year drought in Texas has lead to tight supplies of hay - and higher prices. In turn, higher hay costs have lead to smaller herds of cattle. According to a recent USDA report, nationwide cattle herds are the smallest they have been since 1951. This in turn leads to higher beef prices.
David Anderson, Professor and livestock economist at Texas A&M University says that consumer demand for beef remains strong, but higher prices may force some consumers to eat beef cuts that are lower grade than what they might have eaten previously.
Anderson also adds that recent rains have helped to blunt the impact of drought somewhat and that there may be better days ahead for hay supplies and beef prices.
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