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Agricultural News


Market Signals for Cattle Herd Expansion; Will Mother Nature Go Along?

Mon, 03 Feb 2014 12:41:22 CST

Market Signals for Cattle Herd Expansion;  Will Mother Nature Go Along?
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist, writes in the latest Cow-Calf Newsletter:


As expected, the annual cattle inventory report confirmed that the U.S. cattle herd continued to liquidate in 2013. The inventory of all cattle and calves was 87.7 million head, down 1.8 percent from one year ago and the smallest total U.S. cattle herd since 1951. The beef cow inventory was 29.0 million head, down 0.9 percent from last year and the smallest beef cow herd since 1962. The numbers indicate that the industry is poised to begin rebuilding in 2014…weather permitting.


Among the ten largest beef cow states, the cow herd was up in five states and down in five. The largest decrease in cow numbers occurred in Texas, followed by South Dakota, Montana and Kentucky and Nebraska. Beef cow numbers increased in Kansas, Missouri, Oklahoma, Arkansas and North Dakota. On net, there was a slight increase in beef cow numbers in the top ten beef cow states.   


The inventory of beef replacement heifers was up 1.7 percent, a bit smaller than pre-report expectations. However, the number of beef replacement heifers as a percent of the beef cow herd, at 18.8 percent was the largest in more than 20 years, including the last cyclical expansion in the early 1990s. Among the top ten beef cow states, beef replacement heifers were up in seven states. The result is a net increase of beef replacement heifers of 4.1 percent among top ten states. Only Montana, North Dakota and Kentucky had fewer replacement heifers compared to last year while Texas, Missouri, Oklahoma, Nebraska, South Dakota, Kansas and Arkansas had an increase from 2013. Oklahoma led the increase among states with 45,000 more beef replacement heifers, an increase of 16.1 percent year over year.


The 2013 U.S. calf crop was 33.93 million head, down one percent from 2012. A smaller calf crop, combined with increased heifer retention and fewer feeder cattle imports, resulted in a 2.7 percent decrease in estimated feeder cattle supplies on January 1, at 24.8 million head, down from 25.5 million head one year ago. Inventories of steers over 500 pounds were down 2.5 percent; calves under 500 pounds were down 3.7 percent and other (not for replacement) heifers were down 5.0 percent. The fact that cattle on feed was also down 5.0 percent limited the decrease in estimated feeder supplies outside of feedlots to 2.7 percent. Estimated feeder supplies as a percent of the 2013 calf crop was 72.9 percent, down from 74.2 percent last year and below the ten year average of 74.4 percent. This indicates that a smaller than average percent of feeder cattle supplies were carried over from 2013 into 2014. The number of cattle grazing small grains pasture on January 1 in Kansas, Oklahoma and Texas was 1.61 million head, up 20 percent from last year and the highest total for the region since 2010. The share of estimated feeder supplies in these three states on January 1 increased to 25.7 percent, up from the 2013 low of 25.1 percent but still below the ten year average of 28.3 percent.


The January 1 cattle inventories for all cattle as well as beef cows can be the lows from which the industry rebuilds over the next several years. However, industry is quite vulnerable to drought conditions that could re-intensify this spring and postpone herd expansion once again. Market signals for expansion are strong and growing and the industry is poised to respond. We know what we want to do; we just don’t know what Mother Nature is going to let us do.



   

 

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