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Cattle inventory report bullish

steve everts/iStock/Thinkstock beef cows and calves
Beef cow numbers lowest in 61 years.

While mostly in line with pre-report trade estimates, the highly anticipated USDA “Cattle” report provided an even clearer picture of the drought’s impact on the U.S. beef cattle industry.

The total inventory of cattle and calves in the U.S. as of Jan. 1, 2023, totaled 89.3 million head, 3% below last year and the smallest inventory since 2015. The average pre-report trade estimate was also for a 3% decline.

USDA NASSJan 2023 cattle inventory.png

As expected by analysts, the number of beef cows on Jan. 1 was 28.9 million head, down 4% from a year ago and the lowest inventory since 1962.

All cows and heifers that have calved, at 38.3 million head, were 3% below the 39.4 million head on January 1, 2022. The trade had estimated a 3% decline.

Milk cows, at 9.40 million head, were up slightly from the previous year.

All heifers 500 pounds and over totaled 19.2 million head, 4% below the same period last year. The trade had expected only a 2% decline.

Beef replacement heifers, at 5.16 million head, were down 6% from a year ago. The pre-report average estimate was for a 3% decline.

Milk replacement heifers, at 4.34 million head, were down 2% from the previous year. Other heifers, at 9.67 million head, were 3% below a year earlier.

Steers weighing 500 pounds and over totaled 16.1 million head, down 3% from last year. Bulls weighing 500 pounds and over totaled 2.03 million head, 4% lower than last year. 

The 2022 calf crop in the U.S. was estimated at 34.5 million head, down 2% from the previous year's calf crop. Calves born during the first half of 2022 were estimated at 25.3 million head, down 2% from the first half of 2021. Calves born during the second half of 2022 were estimated at 9.16 million head, 27% of the total 2022 calf crop.

USDA livestock analyst Shayle Shagam said producers are "apparently still very worried about the availability of forage."

Even if drought conditions ease and producer optimism rises, USDA's Gary Crawford said the result of any expansion won't be seen until well into 2025.

Meanwhile, cattle prices are expected to keep climbing as feedlot operators are going to have to bid higher to get cattle into feedlots. Additionally, packers are going to have to pay a higher price for that smaller number of cattle when they are finished, Shagam said.

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