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U.S. beef herd down but stabilizing

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Carol Ryan Dumas
The U.S. cattle inventory on Jan. 1 was 2 percent below a year earlier, but the beef herd shows signs of stabilizing and intentions to expand. Beef replacement heifers are up 2 percent over a year earlier, but good weather conditions will be needed to keep expansion efforts on track.

While USDA’s Jan. 1 tally of U.S. beef and dairy cattle and calves, at 87.7 million head, is down 2 percent from a year ago and the smallest number since 1951, the inventory report shows the beef herd is stabilizing.

Beef replacement heifers are up 2 percent from Jan. 1, 2013, and beef cows were down only 1 percent.

At 5.5 million, the increase in replacement heifers follows year-over-year growth of 2 percent on Jan. 1, 2013 and 1 percent on Jan. 1, 2012. The decrease in beef cows to 29 million follows 3 percent declines on Jan. 1 in both 2013 and 2012.

The replacement heifer and cow numbers show a significant step toward stabilization, a first step toward rebuilding the herd, said Jim Robb, director of the Livestock Marketing Information Center.

The increase in replacement heifers is very similar to last year, but circumstances are much different, he said.

The West is still dealing with drought, but last year cattle producers across the country were dealing with widespread drought and resulting record-high feed costs and couldn’t hold onto those heifers intended for herd expansion, he said.

The increase in replacement heifers this year is “much more likely to translate to herd growth,” he said.

With continued liquidation in the beef industry in 2013, the decline in cattle inventory was not unanticipated, but beef replacement heifers was not up as much as they could have been, said Derrell Peel, Oklahoma State University extension livestock marketing specialist.

But the replacement ratio of the cow herd is at a record-high level at 18.8 percent and consistent with typical expansion modes, he said.

The calf crop was down a bit, as expected. At 33.93 million head, it’s down 1 percent and will probably be down fractionally in 2014 as well, given the slightly smaller cow herd, he said.

USDA’s cattle on feed report shows cattle in large feedlots, 1,000-head capacity and more, on Jan. 1 were down 5 percent year over year, and the inventory report shows the feeder cattle supply outside feedlots is down 2.7 percent, he said.

The industry could see net herd expansion in 2014, but feeder cattle will remain tight until 2016 at the earliest, he said.

The major beef cow states are making it clear the intention to expand is there, with a net increase of 4.1 percent in replacement heifers in the top 10 states and a slight increase in beef cows in those states.

Forage costs will help more than anything, and Dec. 1 hay stocks were up significantly in many regions compared with a year earlier. It will also hinge on spring and summer weather conditions in cow/calf country, he said.

Attempts at herd expansion have been preempted the last three years due to drought, and time will tell if the industry can sustain the expansion now in place, he said.

The annual inventory shows that smaller feedlots with less than 1,000-head capacity are stabilizing and no longer exiting the business at a faster pace then large feedlots, Robb said.

It also shows that cattle numbers are declining more quickly in the Southern Planes than in the Midwest, due to higher feed costs and fewer imports of Mexican cattle, he said.

Beef production in 2014 will be tighter than 2013, but it won’t be the smallest since 1951 due to better efficiencies and higher carcass weights over the years. Some of the decrease will be predicated by a pullback in cow slaughter and lower heifer slaughter, he said.

Beef production is forecast at 24.1 billion pounds – the lowest since 1993 – compared with 25.7 billion pounds in 2013, he said.



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