Potential Drought Impacts on Cattle Markets in the United States

A hot and drier than usual July weather has created a drought across the United States Corn Belt. According to growers, the weather in the whole region in June 2022 was the seventh warmest and third driest month in 30+ years, and July seems to be headed in the same direction so far. Hot and dry weather expanded by 25% across the Midwest region since April, impacting over 44% of the Midwest by July. Regional rainfall was also significantly less than last year, which ranked as the fourth wettest. The week-ending on July 9th showed high temperatures across the Corn Belt.

Forecasts indicate regions across the Corn Belt will see temperatures up to 10°F above normal levels. Predictions also indicate rainfall will be present across the growing region during the second week of July but will miss Kansas, Oklahoma, Texas, and Missouri. These states are in danger of worsening drought. In the first week of July, California faces reservoir levels of 9.5M acre-feet with a storage of 21M acre-feet of water, putting the state at 44% capacity. If the drought continues, the cattle market prices could be affected, resulting in lower wholesale prices for cattle and higher prices for feeds and other inputs.