Cattle Inventory Report: Bullish Beef, Bearish Dairy

January 28, 2011 08:39 AM

Wow! The headliner of this report is beef replacement heifers, which came in 5% under year-ago. Combined with the cow kill we saw in 2010, the beef herd is getting smaller -- much smaller. Beef cow numbers alone suggest the 2011 calf crop will be down 2% from the 2010 calf crop. 

Listen to the audio analysis:

Speaking of the calf crop, the 2010 numbers are down 1% from year-ago. That's the fifth year in a row of smaller calf crops. The 2010 calf crop at 35.685 million head is down 5% from 2005 -- the last time we had a bigger-than-year-ago calf crop.

The second headliner in this report is calves under 500 pounds. At 3% under year-ago, beef supplies for the second half of this year will be tighter than current prices reflect.

The other side of the coin is the dairy industry. Milk replacement heifers came in 1% above year-ago, as did milk cow/heifers calved. While the beef herd continues to contract, the milk herd is expanding.

Based on this date, the cattle market should open stronger Monday, with the strongest price gains most likely in deferred live cattle futures


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