The number of beef and dairy cattle and calves on Jan. 1 in the U.S. was slightly lower year-over-year at 94.4 million head, according to USDA National Agricultural Statistics Service.
USDA’s tally was on target with most pre-report estimates on total inventory but showed a much smaller decline than expected by John Nalivka, owner of Sterling Marketing in Vale, Ore.
“I thought there’d be a lot more liquidation … given the cow slaughter and heifer slaughter last year,” he said.
Heifer slaughter in 2019 was up 7% year over year and represented 49.3% of heifers weighing 500 pounds and above — the highest since 2011, when the industry liquidated 2% of the entire cattle herd, he said.
In addition, that heifer slaughter represented 27% of the 2018 calf crop — also the highest since 2011, he said.
He’s not going to argue with USDA’s numbers, which are compiled from producer surveys, but slaughter is a good statistic, he said.
Cow slaughter in 2019 was up 4% year over year, representing 15.9% of the cow inventory at the beginning of 2019 — the highest since 2013, he said.
“I would have expected a larger drop in the cow and heifer inventory,” resulting in more of a decline in total cattle inventory, he said.
The 1% decline in the 2019 calf crop, however, shouldn’t be a surprise to anyone — given last year’s significant and severe flooding along the Missouri River, he said.
“We had a lot of death in the calf crop last year,” he said.
Last year’s calf crop is largely this year’s feeder cattle supply, and there’s going to be fewer cattle available this year. It won’t show up until the second half of the year, however, as the industry is still working through cattle on feed and cattle placed on feed last year, he said.
Katelyn McCullock, director of the Livestock Marketing Information Center, said the report was largely in line with expectations, but the number of beef replacement heifers was quite a bit smaller than expected.
At 5.77 million head, beef replacement heifers were down 1.9% year over year, according to USDA.
The report also contained a big downward revision to the size of the beef cow herd a year earlier, she said.
At 31.3 million head, the number of beef cows on Jan. 1 was down 1.2% from a year earlier.
The average pre-report estimate was for a 0.6% decrease in the number of beef cows, and the report showed almost double that expected decline, she said.
But the 1.2% decline doesn’t tell the whole story because USDA revised the Jan. 1, 2019, count on beef cows to 75,000 fewer head. This year’s 1.2% decrease was on top of that 75,000 head loss, she said.
The implication is fewer beef cows and a smaller calf crop moving forward, she said.
“The U.S. (beef) cow herd has stopped expanding and may be entering a contractionary phase,” she said.
But the report didn’t suggest a severe liquidation period in the near future, she said.