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Agricultural News


At What Point Do We Run Out of Cattle?

Tue, 16 Nov 2010 10:53:02 CST

At What Point Do We Run Out of Cattle? The U.S. beef cow herd has decreased 12 of the last 14 years, dropping from a cyclical peak of 35.3 million head in 1996 to the January, 2010 level of 31.3 million head. This represents the smallest beef cow herd since 1963. Combined with smaller dairy cow numbers, the 2010 calf crop is expected to be 35.4 million head, the smallest U.S. calf crop since 1950. Total U.S. cattle inventory has decreased by almost 10 million head since 1996 to the January, 2010 level of 93.7 million head, the smallest cattle inventory since 1959.


In contrast, total beef production has not changed accordingly. In fact, 2010 beef production is projected at 25.9 billion pounds, slightly higher than the 1996 level of 25.4 billion pounds. This leads to two questions: how have we maintained beef production with declining inventories? and can we continue to maintain production? We have maintained production thus far in two primary ways. First, decreasing inventories allows the industry to utilize that inventory as production while numbers are declining. Secondly, for the decade, between 1996 and 2006, cheap corn allowed the industry to feed animals to ever increasing carcass weights and to feed lightweight calves for many days in feedlots. Feedlot inventories are thus maintained by a slower rate of turnover. Thus, the industry was able to effectively turn fewer cattle into more pounds of beef.


The situation is now different. Expensive corn forces the industry to feed heavy yearlings and move them through the feedlot faster. Carcass weights in 2010 have been below year ago levels almost all year and high feed costs likely limits carcass weights to little or no trend in coming years. A faster feedlot turnover rate exposes the shortage of cattle quickly as feedlots scramble to find sufficient supplies of feeder cattle to place on feed and maintain feedlot inventories. So far, we appear to have been able to do that. Total cattle slaughter for 2010 is running almost two percent above 2009 levels. However, an analysis of the slaughter mix is instructive. Steer slaughter is up less than one percent this year. By contrast, heifer slaughter is up nearly 3 percent and cow slaughter is up 4 percent. It is clear that we are maintaining slaughter rates, in the short run, with our females.


This is not sustainable without accelerating herd liquidation going forward. At some point we will try to stabilize the herd size and then expand a bit. Given the current situation this implies a significant reduction in cattle slaughter in the short run even to hold the cow herd size steady. It seems likely this process will start in 2011.


Our thanks to Dr. Derrell Peel of OSU for these comments, as written for the weekly electronic Cow Calf Corner from he and OSU's Glenn Selk.



   

 

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