Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211


Agricultural News

Dr. Derrell Peel with an Update on Cattle Herd Dynamics

Mon, 28 Dec 2020 10:22:15 CST

Dr. Derrell Peel with an Update on Cattle Herd Dynamics

Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel gives an update on herd dynamics.

Much of 2020 has been preoccupied with daily and weekly slaughter numbers, carcass weights and boxed beef prices, along with monthly cattle on feed dynamics. The intertemporal volatility through the year adds to challenge of assessing what, exactly, is the situation regarding the cattle cycle and longer term herd dynamics. USDA will be providing estimates on January 29, 2021 regarding cattle inventories going into 2021. The data available at this time provides mixed signals about how herd inventories have changed in 2020.

Cowherd changes depend on both heifer retention and cow culling. On January 1, 2020, the number of beef replacement heifers was 18.4 percent of the beef cow inventory. This was down from the peak retention in 2016 of 21.0 percent, when herd expansion was in full force. Historically, the replacement heifer percentage drops below 18 percent during herd liquidation. Of course, producer plans can change during the year. The July inventory estimate for beef replacement heifers was unchanged from last year but is a low enough level to potentially suggest some herd liquidation.

Heifers not retained for breeding end up in the feedlot. On average, the number of heifers in feedlots in 2020 was down 1.1 percent year over year, with an October 1 estimate that was about equal to one year ago. Heifer slaughter in 2020 is projected to be down about 3.6 percent year over year. Heifer slaughter as a percent of the cow inventory is not low enough to suggest herd expansion nor large enough to suggest significant liquidation. Taken together, the various heifer data seem to suggest mostly steady heifer retention, which could support a 2021 herd inventory either side of unchanged from 2020 levels.

Beef cow slaughter in 2020 is projected to be up about 2.6 percent year over year. This implies a net beef cow culling rate (beef cow slaughter as a percent of herd inventory) of 10.5 percent. Beef cow culling has increased from the record low level of 7.6 percent in 2015 when herd expansion was accelerated. Herd culling above 10 percent is consistent with modest levels of herd liquidation though the current level is below the culling rates (typically above 11 percent) that indicate significant herd liquidation. The mid-year cattle report pegged the beef cow inventory down 0.8 percent year over year, generally consistent with the cow slaughter data this year.

In total, the most likely scenario appears to be a beef cowherd on January 1, 2021 in the range of unchanged to down one percent year over year. This would continue the slow slide in cattle numbers and general tightening of cattle and beef production in the coming year. Total 2021 cattle slaughter is forecast to be down about one percent leading to a year over year decrease in beef production of 1-2 percent. Herd dynamics in 2021 could affect these forecasts. If herd liquidation should accelerate, the short-term impacts would be an increase in cattle slaughter due to more heifers and cows in the slaughter totals. Conversely, should the industry move to expand cattle inventories, cattle slaughter would be reduced with fewer heifers in feedlots and fewer cows culled. There is potential for either scenario. The cattle inventory trajectory in 2021 will depend on numerous factors including control of the pandemic, U.S. macroeconomic conditions, global protein markets, drought conditions, and feed prices, among others.

As we wrap up 2020, a couple of items for CCC readers. First, a big thank you to all those who replied to the mid-December request for information on how the CCC is used and distributed. The information is very helpful. And lastly, I wish everyone a happy, healthy and prosperous New Year!



WebReadyTM Powered by WireReady® NSI


Top Agricultural News

  • Oklahoma Youth Expo Sale of Champions Sale Order Available Here- Sale Set for 4 PM Friday  Fri, 17 Mar 2023 04:50:54 CDT
  • Rural Voters Dominated Vote to Defeat Recreational Marijuana March 7th  Fri, 10 Mar 2023 07:13:05 CST
  • Ron Hays Talks to Israeli Ag Tour Guide Colin Lotzof About the Miraclel of Ag in Israel  Wed, 22 Feb 2023 22:11:04 CST
  • OALP Members Experience First Hand View of Cutting Edge Drip Irrigation Technology as Israel Travel Ends  Wed, 22 Feb 2023 10:51:49 CST
  • OALP Members Get First Hand View of Cutting Edge Drip Irrigation Technology as Israel Travel Ends  Wed, 22 Feb 2023 10:50:10 CST
  • Oklahoma Ag Leadership Program Sees Fruit, Beef and Dairy Production North of the Sea of Galilee in Israel  Mon, 20 Feb 2023 21:56:02 CST
  • Oklahoma Ag Leadership Program Sees Diverse Farm Operations in Jordan River Valley of Israel  Sun, 19 Feb 2023 21:17:30 CST
  • Israeli Tour Guide Mark Kedem Talks About The Cultural Aspects of What Class XX of OALP is Experiencing   Sat, 18 Feb 2023 22:17:23 CST

  • More Headlines...


    Ron salutes our daily email sponsors!

    Oklahoma Beef council Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit Ag Mediation Program P&K Equipment Oklahoma City Farm Show Union Mutual Stillwater Milling Oklahoma Cattlemen's Association KIS FUTURES, INC.

    Search OklahomaFarmReport.com

    © 2008-2023 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.