The southern United States is in the midst of a severe drought. Texas has suffered estimated crop and livestock losses opf $7.62 billion since 2010 (ehwn the drought began). These losses have largely stemmed from lack of water needed to maintain cattle stocks. Ranchers have thereby been compelled to sell off much of their herds for slaughter.
A. What was the immediate effect of the drought on the equilibrium price and quantity of beef in the United States?
B. Beef prices were at record highs during the summer of 2014. In light of your answers to Part A, provide a justification for this observation.