Expansion Remains Cautious

Heavy cow slaughter rates and drought-weary producers looking to run stockers rather than cows could delay herd expansion.

Wes Ishmael

April 21, 2012

2 Min Read
Expansion Remains Cautious

“While there is plenty of anecdotal evidence that cow/calf producers are in herd rebuilding mode—indeed some areas of the country are well under way in expanding their herds, much will depend on what happens with feed supplies for cows this spring and summer,” say Len Steiner and Steve Meyer in a CME Group Daily Livestock Report last week.

Even with feed available, some producers are understandably reluctant to keep more heifers or buy more replacements at current prices.

For instance, analysts say in the April USDA Livestock, Dairy and Poultry Outlook (LDPO), “There is anecdotal evidence that Southern and Southwestern cattlemen are hedging their bets by buying stockers rather than cows to graze this summer. This strategy could also serve to reduce grazing pressure on drought-damaged pastures, allowing pasture plants a chance to recover from 2011 drought effects.”  

But, they add, “By restocking with stockers rather than cows, cattlemen are effectively delaying the rebuilding of national cow inventories compared with the timing originally anticipated. The heavy rate of cow slaughter observed during the first quarter of 2012 will also affect the calf crop in 2012, likely to be down slightly as a result, and could also adversely affect the January 1, 2013, total cow inventory, which—combined with the relatively low increase in heifers expected to calve in 2012—could also be down slightly from the already low inventories…”

The LDPO folks add, “…a smaller calf crop in 2012 would likely result in fewer feeder cattle available for placement on feed in 2013 and potentially lower beef production in 2013 and early 2014. This will be exacerbated to the extent that producers keep heifers from the 2012 calf crop for herd replacements or herd rebuilding.”

If you’re looking for more perspective on the market road ahead, consider the quarterly Beef Cattle Economics webinar May 1.

Subscribe to Our Newsletters
BEEF Magazine is the source for beef production, management and market news.

You May Also Like