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Cattle inventory reflects drought

Published on February 6, 2013 3:01AM

Last changed on March 6, 2013 12:29PM


Capital Press

The effects of the continued and more widespread drought in 2012 showed up in the reduced U.S. Jan. 1 cattle inventory released Feb. 1.

But it also shows a willingness of producers to rebuild the herd, analysts say.

All cattle and calves for beef and dairy production, at 89.3 million, came in 2 percent below the count on Jan. 1, 2012. The number of beef cows, at 29.3 million, was 3 percent below last year, reflecting the challenges of the drought that sent more cows to slaughter in 2012.

But the number of beef replacement heifers is up 2 percent, following a 2.4 increase a year ago.

"We've been retaining heifers for the last three or four years," said John Nalivka, owner of Sterling Marketing, a Vale, Ore., consulting firm for the red meat industry.

While the all-cattle inventory is the lowest since 1952, and the beef herd has been declining for years, it's important to keep in mind the decline in beef numbers is not going to continue down that path, he said.

Beef cattle numbers are down because the 2011 drought in big cattle country in the Southern tier pushed cow slaughter there up 21 percent. Drought in the central portion of the U.S. in 2012 pushed cow slaughter up 11 percent there.

A lot of beef cows went to slaughter, but the U.S. would have already been in herd rebuilding mode had it not been for those droughts, he said.

"I think we're starting to bottom out of this cow liquidation," he said.

With strong price incentives to rebuild the herd, he thinks expansion is not far off.

"I think they'll go buy some hay and tough it out," he said.

If there's another drought, however, they might not want another year of high-priced hay. Expansion is going to be a function of forage availability, he said.

It's going to take at least until 2015 to see an increase in beef production, however. A decline in the calf crop, down 3 percent in 2012, is consistent with the declining cow herd, making fewer feeder cattle available. The additional beef heifer retention will add to that short supply, he said.

"That's really the number that makes the difference. That's where we're staying this year," he said.

All bull calves will be sent to feedlots, but that only represents half of the calf crop. The deciding factor in feeder supplies is the number of heifer calves going to feedlots, he said.

While overall cattle numbers were not unexpected, revisions to the Jan. 1, 2012, numbers do affect the interpretation of the report, said Derrell Peel, University of Oklahoma extension livestock marketing specialist.

USDA's revised estimate for Jan. 1, 2012, added 275,000 head to the beef cow inventory, showing that cow liquidation in Oklahoma and Texas in 2011 was not as severe as earlier indicated, he said in the university's Cow/Calf Corner newsletter on Monday.

The Jan. 1, 2012, estimate on beef replacement heifers was also revised upward by 50,000 head, meaning the inventory of beef replacement heifers was up 2.4 percent at the start of 2012, he said.

But the Jan. 1, 2013, number, up 1.9 percent over a year earlier, shows a low percentage of those potential replacements actually made it into the herd, he said.

While the inventory of beef replacements -- at 18 percent of the beef cow herd -- is the highest since 1995, how many make it into the herd will depend on whether drought conditions moderate, he said.

Limited beef cow herd expansion is possible in 2013, but it will require almost perfect conditions with respect to cow culling and heifer placement in the herd, he said.

"The ongoing drought conditions do not make that likely," he added.

Jan 1. U.S. cattle inventory

Class 2013 2012 percent change

Million head

All cattle and calves 89.3 90.8 -2

Beef cows 29.3 30.2 -3

Dairy cows 9.2 9.2 0

Beef replacement heifers 5.4 5.3 +2

Expected to calve 3.3 3.2 +2

Dairy replacement heifer 4.5 4.6 -2

Expected to calve 2.9 3.1 -6

Other heifers 9.2 9.4 -3

Steers 15.8 15.8 0

Bulls 2.0 2.1 -2

Calves 13.8 14.1 -2

Cattle on feed 34.3 35.3 -5



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