Agricultural News
Is More Beef Herd Liquidation in Store for 2013?
Mon, 08 Apr 2013 10:41:56 CDT
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist writes in the latest Cow-Calf Newsletter:
Drought conditions in parts of the Plains have improved modestly since the beginning of the year. Some improvement has occurred in South Dakota, Kansas and Oklahoma. Additionally, the latest drought outlook from the Climate Prediction Center continues to push the line for potential drought improvement farther west. Though this raises hopes for drought moderation, the fact is that much of the Central Plains is still in serious drought and very vulnerable to worsening drought conditions. The next two to three months are critical to determine the forage prospects for the remainder of the year.
Meantime, there are indications that the prolonged winter weather may be causing additional herd liquidation at the current time. Beef cow slaughter, after decreasing almost ten percent in the first eight weeks of the year, is up 6.8 percent in the last two weeks compared to year ago levels for the same period. This brings the year to date total to a meager 6 percent decrease compared to 2012. A decline in beef cow slaughter of more than double this rate would be required to suggest herd stabilization. There may be several factors contributing to accelerated herd liquidation in recent weeks. Extended cold weather may have pushed some producers, especially in the central and northern plains, beyond their exhausted hay supplies with no alternative but to sell additional animals.
In the Southern Plains, I am hearing some anecdotal stories of cows that are showing up without a calf. With drained forage supplies, producers would likely cull these cows immediately. The idea that two years of drought stress may be showing up as reduced reproductive performance in cows this spring is not at all surprising. This, combined with recent storms that may have added to calf death loss, may further reduce an already small 2013 calf crop.
All of this begs the question of what the situation is regarding replacement heifers. The modest increase in replacement heifers on January 1, 2013 may, like 2012, turn into a very low rate of placement of heifers into herd. Or it could be that producers are sacrificing cows in the face of limited forage supplies but holding onto heifers to replace them. What is happening now and what happens between now and June will likely determine the overall herd inventory for the remainder of the year. After seven years of continuous liquidation which occurred as part of herd liquidation 15 of the last 17 years, the question of whether the beef cow herd is liquidating or stabilizing in 2013 has significant implications for several years.
Unfortunately, there will be no data to answer these questions until 2014. USDA's National Agricultural Statistics Service (NASS) has decided to eliminate the July Cattle report. Thus, the industry will have no indication of what is happening with cow liquidation, heifer retention or the size of the calf crop until early next year. There is much uncertainty about additional drought impacts this year on top of everything the beef industry has been through in recent years. The formidable challenges of minimizing expected decreases in beef production; maintaining feedlot and packing infrastructure; and rebuilding the cow herd all depend on having timely information on cow herd inventory changes and feeder supplies. I can't think of a worse year in two or three decades to not have the mid-year inventory information available.
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