WHILE official statistics from the U.S. Department of Agriculture will not be available until January, the latest estimates from the Livestock Marketing Information Center (LMIC) indicates a beef cow population likely 2.1% smaller than it was a year ago, and a total beef herd down 1.8% year over year.
LMIC director Jim Robb and Oklahoma State University economist Derrell Peel noted that because USDA eliminated its mid-year cattle inventory report as part of Sequestration-driven cutbacks, the academic consortium’s estimate was the industry’s best guess at the size of the herd until the National Agricultural Statistics Service releases its annual inventory update at the beginning of 2014.
“The status of cattle inventories in the U.S. is unknown at this time,” the economists explained, sharing estimates compiled from members of LMIC’s technical advisory committee. “Nationally and by region, the group was unanimous that the beef cow herd is down so far this year, with the U.S. assessments ranging from less than 1% to more than 2%. The majority of the group indicated that the beef cow herd was likely down between 1 and 2% as of July 1. Assessments on beef replacement heifers was more variable with some limited view that modest heifer retention was occurring in some areas with a majority feeling that no significant heifer retention was occurring yet or that some heifers earlier retained for breeding had been diverted into feeder supplies.”
The long tail of the 2012 drought, not to mention the multi-year drought plaguing a significant portion of the cattle producing regions of the country, has producers in a liquidation mode, with cow slaughter thus far in 2013 supporting a consensus that the herd is still shrinking. Regardless of producers’ decisions the latter half of the year – which could well be toward starting to keep more heifers for breeding, looking toward improving returns on the horizon – the pace of slaughter through midyear is hard to shake.
“Beef cow slaughter was down 3.1% year-over-year in the first half of 2013,” Robb and Peel noted. “Beef cow slaughter has fallen sharply in the past three weeks and is likely to be down for most of the remainder of the year. The number of heifers on feed usually decreases between January and July and was down this year, but dropped less than normal indicating that some animals previously identified as replacements likely entered feedlots in the first six months of this year.”
Moreover, heifer slaughter is down year to date, though has still been running above year-ago levels in the past four weeks, indicating the larger number of heifers finishing in feedlots. While heifer retention may pick up soon, the damage, in other words, has already been done.
Robb told Feedstuffs that LMIC projects significantly improved cow/calf sector returns in the latter half of 2013, and potentially record-setting returns in 2014. More on LMIC’s projections can be found in the Aug. 5 edition of Feedstuffs.