Subscribe to Our Newsletters
BEEF Magazine is the source for beef production, management and market news.
July 13, 2020
Beef cow numbers at the beginning of this year were 31.3 million, which was 1.2% less than the previous year, indicating that the recent expansion phase was over. Notwithstanding a sizable drought, there was little to suggest the nation’s beef cow herd would shrink or grow much.
Even with all of the uncertainty spawned by COVID-19, beef cow and heifer slaughter in recent weeks supports that notion, unless you dig a little deeper.
Although beef cow slaughter declined year over year as the pandemic restrained packing capacity, analysts with the Livestock Marketing Information Center (LMIC) point out it was running 2% more year-to-date toward the end of May.
Fed heifer slaughter at the time, another indicator of herd size intentions, was running 4% less than the previous year, but that likely offered a false picture.
“First, slaughter disruptions have caused data patterns that are atypical. The backlog of fed cattle is likely skewed towards more heifers. Because of the lighter dressed weight, they can likely stay on feed longer than a heavyweight steer,” LMIC analysts explained in the organization’s late May Livestock Monitor.
“Second, heifer slaughter should fall below a year ago after last year’s large numbers of heifers on feed and a smaller 2019 calf crop.
“Lastly, producers are cautious after a couple of years of negative returns for cow-calf operations. Many are not thinking of expanding. Adding worry for many in the West are the expanding drought conditions.”
As of June 4, according to the U.S. Drought Monitor, 35.9% of the nation ranged from abnormally dry conditions to extreme drought, compared to 12.9% at the same time a year earlier.
Affected areas included from Colorado west and up through the Northwest, as well as northern New Mexico, western Kansas and the Panhandles of Oklahoma and Texas.
That same week, USDA’s Crop Progress report rated 49% of the nation’s pasture and range in Good or Excellent condition, compared to 68% a year earlier. At the other end of the scale, 19% were in Poor or Very Poor condition, versus 7% the previous year.
Overall feed supplies appear to be plentiful and cheaper, though.
In May, USDA projected a record large corn crop of 16 billion bushels with a season-average farm price of $3.20 per bushel, the cheapest since 2006-07. Hay stocks at the beginning of May were 37% more than the previous year.
At the time, LMIC projected the season-average alfalfa price at $150 per ton, about 17% less than the previous year; and fractionally lower prices for nonalfalfa hay at $132.50 per ton.
At the beginning of May, LMIC estimated the breakeven price for a steer placed (Southern Plains feedlot) in April and sold in September at $97 to $98 per cwt, suggesting cow-calf producers might want to evaluate the possibility of retained ownership this year.
“Expenses and feed costs are expected to be lower, and cull cow values have improved in some areas from last year. Under these assumptions, cow-calf returns should be better than the year before, but the outlook is still full of uncertainty,” LMIC analysts say.
They expect fourth-quarter calf prices this year to be similar to those of the same period in 2019.
Add it all up, and keeping in mind a wide range of possibilities, LMIC analysts say, “It seems likely the beef breeding herd will be smaller than a year ago. A smaller July 1 inventory will imply the same situation applies to Jan. 1, 2021.
“This would be the second consecutive year-on-year decline for the beef breeding herd that has only just begun this liquidation phase, which may now be sharper than previously expected.”
The next official estimate of cow numbers comes in USDA’s semiannual Cattle report, scheduled to be published July 24.
You May Also Like
The dollars and sense of sustainabilityFeb 21, 2023
Current Conditions for
Enter a zip code to see the weather conditions for a different location.
Smokehouse Creek Fire becomes largest in Texas historyFeb 29, 2024
Programs demonstrate U.S. beef’s versatility for China’s foodservice sectorFeb 28, 2024
APHIS strengthens animal health surveillance with UME investigation fundingFeb 28, 2024
NCBA, CattleFax partner on new culling resourceFeb 28, 2024