Editor’s note: the following was written by Lee Schulz, Iowa State University Extension livestock economist, for the university’s March 2019 Iowa Farm Outlook newsletter.
The Jan. 1, 2019, USDA Cattle report, released Feb. 28, showed an increase in the all cattle and calves inventory for the fifth year in a row.
The cattle inventory report is the one cattle report each year that includes all the states and all the cattle from all sizes of operations.
The U.S. had 94.76 million head of cattle and calves on Jan. 1, half a percent above 2018. This puts the number of cattle in the country at roughly 2009 levels. Following 2009 the cattle herd dropped to a 62-year low of 88.53 million head by 2014, then increased 6.23 million head in the last five years.
The beef cow herd was 31.77 million head on Jan. 1, 1 percent larger than a year ago. Milk cow numbers at 9.35 million head were down 0.8 percent.
USDA reported the 2018 calf crop at 36.4 million head, 1.8 percent larger than 2017.
Expansion and contraction
Peak beef production of this cattle cycle is not expected until early in the next decade.
Producers in some areas of the country are still expanding. Others are peaking or reducing inventories. The Southern Plains (Oklahoma and Texas) expanded their cow numbers by 197,000 head in 2018, and this represents about 65 percent of the country’s expansion.
Other important beef cow regions and their magnitude of beef cow expansion over the past year includes:
- the Great Plains (CO, KS, MT, NE, ND, SD, WY) up 80,000 cows or 0.9 percent
- the Corn Belt (IL, IN, IA, MI, MN, MO, OH, WI) up 19,000 cows or 0.4 percent.
There are certain states in these regions where drought impacts and thus forage supplies remain a concern and have impacted beef cow inventories. Montana saw a 49,000 decline in their beef cow inventory and Missouri lost 27,000 cows.
The Iowa beef cow inventory remained unchanged at 950,000 head.
Leading the contraction was the Southeast, down 4,000 beef cows, and the West, down 2,000 beef cows. Recent drought in the West and excessive moisture in the Southeast has likely been a reason for reductions.
Beef cow replacements on Jan. 1 were 5.92 million head, down 3 percent from last year. Does this mean the end of the beef herd expansion after five years?
Maybe, but the combination of the beef cow herd and replacements may lead to a larger calf crop again in 2019. While the kept replacement number is down, it is still a relatively high percent of the beef herd inventory at 18.7 percent. This ratio is down from 19.4 percent one year ago as heifer retention moves closer to levels consistent with no herd growth.
Large heifer retention levels occurred in 2015-17, with beef replacement heifers at over 20 percent of the beef cow herd, which had never occurred in the history of the data back to 1965. Over the past 20 years this ratio has averaged 18 percent.
Cattle on Feed
Cattle on feed in all feedlots on Jan. 1 was 14.37 million head, up 1.6 percent from a year ago. This was made up of 11.69 million head in feedlots of 1,000 head or more capacity and 2.68 million head in feedlots with less than 1,000 head capacity.
Jan. 1 on-feed inventories of feedlots with a capacity of less than 1,000 head over the last 20 years has averaged 19 percent of the total cattle on feed from all feedlots in the United States. This suggests that nationally, small feedlots are at least maintaining their important role within the cattle feeding sector.
One other supply side story related to beef cattle inventories is the hay market situation. Dec. 1 hay stocks declined nationally for the second year in a row to 79 million tons, the smallest Dec. 1 figure since the drought-stricken year of 2012.
Texas inventories were hit the hardest, losing over 2 million tons in inventory from the year before. Wisconsin and Missouri also had significant reductions in stocks of 900,000 tons each.
Given tight inventories and high prices, hay acreage is expected to be higher in the 2019‑20 marketing year. Poor forage conditions and delayed forage growth could prompt beef cow herd reductions.
Remember, cattlemen match cattle numbers to given resources. The numbers are the foundation to expanding and/or contracting herd numbers.