U. S. Cattle inventory and selling strategies discussed
The U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS) Cattle Report, released in July, shows there are 95.9 million head of cattle and calves on U.S. farms, which is three percent below the headcount in 2022.
The cattle report provides a basic inventory of the nation’s cattle herd, as well as an estimate of breeding animals for beef and milk production and the number of heifers being held for breeding herd replacement. Cattle and calves being raised for meat production are included, and the number of calves born during the previous year is reported as well.
NASS reports U.S. beef cows are down three percent, the calf crop is down two percent and milk cows remain unchanged.
Future opportunities
During an episode of the Beef Cattle Industry (BCI) Cattle Chat podcast, dated Aug. 4, Kansas State University (KSU) BCI Director Dr. Brad White discusses cattle inventory and selling strategies with KSU Professor of Agricultural Economics Dr. Dustin Pendell and BCI Assistant Professor Dr. Phillip Lancaster.
Pendell expresses, from an economist’s viewpoint, cow and heifer numbers are down compared to the January report, but cattle numbers have not stabilized. Herds are still being liquidated, meaning prices will remain high and may even go higher.
“Inventory numbers have not bottomed out yet. As herds continue to shrink, cattle prices are going to stay high a little longer and possibly go a little bit higher,” he notes.
However, White mentions cow/calf producers must face the decision to either sell heifers or hold them back to continue production. But in some areas across the country where herds have been decimated by drought, producers had to sell off their herds to survive and the rebuilding process remains difficult with high calf prices.
From a cow/calf producer standpoint, planning out the economics is key, Lancaster adds.
“In drier areas, the question is whether to buy feed for cows or sell cows,” he concludes. “Producers should expect higher calf prices a year from now and should hold onto the four- to eight-year-old cows that are going to produce the best calves, which can sell into a market with high calf prices.”
White agrees, adding retained heifers can contribute to financial success of the herd, but it will take a longer period of time compared to cows.
“Once we start saving heifers, it is a long-term investment because it takes months before they can contribute offspring to the herd,” White says.
“One factor influencing the liquidity of the cattle market is drought,” Lancaster responds. “If a producer is in an area getting rain, they may be able to keep extra heifers and cows to add to the herd, but if they are experiencing drought, then there will be feed costs to account for in the decision to keep or sell.”
“Producers must know their resource availability,” White adds. “If I have resources available, I can be more selective about which females I keep, and I can sell the ones I don’t want at a reasonable price.”
Along with the production cycle, Pendell says consumer demand also can influence cattle prices.
“We are starting to see consumer beef demand softening as consumers were not willing to pay as much for their beef in June as they did in May,” Pendell says. “Eventually, this will translate down to cattle prices along with the influences of international trade.”
Lancaster reiterates producers need to be efficient in keeping cows within the herd and understand this is a long-term process – the situation will not change overnight.
Weaning dates
In areas where forage quality and quantity are inadequate due to drought or access to feed, early weaning could be a great management practice, especially for young cows raising their first calf.
White notes weaning calves early – removing a calf less than seven months – is a tool used by cow/calf producers to maximize profits.
Research at the University of Nebraska-Lincoln states weaning a calf early significantly reduces nutrient demands placed on the cow and helps improve the cow’s body condition, which has the potential to carry over through the winter.
Early weaning depends on the producer’s situation, and given the factors producers face, Lancaster states, “It is all about doing the math.”
He adds producers can encounter different scenarios, and doing the math will allow them to find the best possible solution for their operation.
“If a producer weans early and sells the calf, they can take advantage of selling at a higher price but for a lighter weight calf and can minimize the current forage supply,” he notes. “Early weaning does impact a calf’s long-term weight or performance.”
Pendell adds, by keeping a calf longer, producers can run the risk of market prices falling and or possible health issues occurring, which increases expenses.
He continues to explain creep feeding is another option for a cow/calf operation but does not reduce the nutrient demand on the cow.
“Producers need to formulate a feeding conversation and evaluate if utilizing creep feed is a cost-effective approach to early weening,” Pendell concludes.
Oregon State University research concludes creep feeding is not intended to help the cow with her condition, as calves will continue to suckle similar amounts of milk but decrease the amount of forage they consume.
This research has shown if the goal is to improve cow condition, increasing cow feed rather than creep feed for calves is more economical.
Supply and demand
According to the USDA Economic Research Service, the July Cattle Report gives an indication of producers’ intent to retain females in their herds. Beef production in 2023 is higher with expected cattle slaughter, offsetting a weight decline in the third quarter.
USDA research is projecting the beef production for 2024 to be lower than expected as the fed cattle market shifts in late 2023 rather than in early 2024, and cattle price forecasts are raised based on a firm demand and tighter supplies going into 2024.
Beef imports for 2023 are raised based on recent trade data, as exports for the year are reduced slightly, but no change is made to the export forecast for 2024, USDA reported.
Based on the Consumer Price Index, data from the U.S. Department of Labor’s Bureau of Labor Statistics, the average inflation rate for most animal products in the first half of 2023 was lower than the first half of 2022.
In fact, inflation was lower for pork, beef, veal and poultry and for dairy products. Inflation was slightly higher in the first half of 2023 compared to the first half of 2022 at 8.6 percent. The largest increased inflation rate for the first half of 2023 was for eggs, at 27 percent.
Having a strategy to deal with fluctuating cattle prices is much better than reacting, and producers should not buy in or buy out on a whim. Instead, they should think about their marketing opportunities for the long term.
Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
