Commercial beef production in 2012 was down



via Drovers CattleNetwork - 01/17/2013


Annual 2012 commercial cow slaughter is expected to be below slaughter in 2011. This level of slaughter would represent 16.8 percent of the January 1, 2012 total cow inventory and is near the 17.1 percent for 2011, both of which exceed the 16.2 percent for 2010—and, more significantly, the 16.3 percent for 1996, when a summer drought and a spike in corn prices set off an extended period of cow-herd liquidation. Prior to the 1996 liquidation rate, the highest rates of cow slaughter since 1980 occurred in 1984 (17.8 percent of January 1 cow inventory) and 1986 (17.7 percent). For most of 2012, dairy cows accounted for a larger proportion of slaughter, although drought throughout the year also motivated a steady stream of beef cows going to slaughter. Unlike the last several years when beef cows represented unusually large shares, dairy cow slaughter during at least the last part of 2012 was atypically high, largely due to the effects of high feed costs and other factors on profit margins.


One possible offset to the effects of high levels of commercial cow slaughter on the breeding herd is the potential for heifers to be retained to replace the cows going to slaughter. Heifers, being generally smaller and less expensive to feed than cows, and ideally having better genetics than the cows they replace, should produce bigger, better calves (although there can be some offsets related to heifer calving and rebreeding). The heifer share of total commercial steer and heifer slaughter has declined from 37.1 percent through November 2011 to about 36.4 percent through November 2012. On an annual basis from 2007 through 2011, the share had been running between 37 percent (2011) and 37.7 percent (2007). Lower shares imply more heifers are being retained for cow-herd replacements. The National Agricultural Statistics Service Cattle report to be released on February 1 will provide information about heifer retention, along with changes in cow inventories.


The prevalence of drought-reduced pastures over most of the central United States was thought to be a key factor affecting retention of feeder cattle for growth to heavier weights. Consistent with this logic, placements of the lightest (under 600 pounds) feeder cattle in feedlots in 2011 and recently in 2012 have been above historical levels...