Economics are putting the brakes on herd expansion

More heifers in the slaughter mix and more beef cows coming to town can only mean one thing.

 

Wes Ishmael, BEEF Magazine 

Nov 25, 2019

 

Increasing cow and heifer slaughter continue to suggest the nation’s herd expansion is running on fumes, if not beginning to contract.

 

Through the first 42 weeks of the year, total beef cow slaughter was 2.9% more than last year and weekly heifer slaughter year was up 7.3%, according to the Livestock Marketing Information Center (LMIC).

 

“Cow slaughter, proportional to the beef cow herd, has been higher than any year since 2011, and we're killing large numbers of heifers, relative to steers,” says Brett Crosby, a fifth-generation Wyoming rancher and co-founder of Custom Ag Solutions (CAS), an agricultural consulting firm.

 

“Change in cow inventory is highly correlated with heifer slaughter, cow slaughter and prior-year replacements. Different models point to reductions of 50,000 to just over 100,000 beef cows that have calved, in the next Jan. 1 Cattle inventory report.”

 

Beef cow slaughter numbers this year tracked close to last year’s pace through much of this year. However, Elliott Dennis, livestock marketing economist at the University of Nebraska-Lincoln, says USDA reports indicate significant beef cow harvest since the week of Sept. 14.

 

“There is a clear uptick between beef cow slaughter in 2018 and 2019 beginning in week 37 and well above the 3-year average,” Dennis says in a recent issue of In the Cattle Markets. “Approximately 28% of the increase in beef cow slaughter came from regions which include Nebraska, Texas, and Kansas; 32% from Idaho, Oregon, and Washington; 16% from the Southeast.”

 

Plus, in a recent Livestock Monitor, LMIC analysts explain, “Heifer slaughter is on pace to slaughter about half a million head more than was in the ‘other heifer’ category in the Jan. 1, 2019 report. That would indicate more heifers that were considered for replacement were pulled from the herd.

 

“The latest Cattle on Feed report showed 39% of the on-feed mix were heifers. This suggests that the number of heifers held for replacement for beef-type animals will also likely be below a year ago. LMIC is penciling in beef heifer replacements down more than 2%.”

 

Calf and cull cow prices are cyclically low ...

 

Price relief on the horizon ...  

 

more, including links

https://www.beefmagazine.com/marketing/economics-are-putting-brakes-herd-expansion