USDA Cattle Report Summary

06:11AM Feb 25, 2014

Fat steers water tank( Wyatt Bechtel )

By: Lee Schulz, Iowa State University Extension livestock economist

USDA’s annual cattle inventory report confirmed what the industry had been suspecting for the past year — another year of contraction. Most final estimates were within the range of pre-report expectations with a few exceptions (namely heifers for beef cow replacement being up only 1.7%, calves under 500 pounds being down considerably at 3.7%, and the annual calf crop being down only 1.0%) ultimately reminding us that while herd rebuilding is pending in the beef cattle sector, it will likely be a slow process (at least initially) given the historically small inventory that the herd will be rebuilding from.

All told, market signals for expansion are stronger than they have been in years and continue to grow and the industry is poised to respond. Conditions permitting, 2014 could be a year of herd stabilization (with little or no growth) that often occurs in first year of herd expansion. Most herd expansions in the past have included one to two years of minimal or modest herd growth before accelerating for two to three years.

U.S. Cattle Inventory
At 87.73 million, the report showed the lowest Jan. 1 inventory of all cattle and calves in the U.S. since the 1951 total of 85.57 million. By this year, one of the longest and most severe liquidation phases in the history of cattle cycle has reduced the U.S. beef cow herd to 29.04 million, its lowest level since 1962. Last year marked the eighth consecutive year of declining beef cow numbers. And, although the 2013 beef cow culling rate of 11.0% (2013 beef cow slaughter as a percent of the Jan. 1, 2013 beef cow inventory) was recorded as the sixth consecutive year of double digit beef culling, low rates of beef cow slaughter in the last quarter of 2013 suggest producers are indeed beginning the process of herd rebuilding.

The report suggests that collectively cattlemen have continued to add youth to their breeding herds as replacement heifers are up from last year, even while the national beef cow herd has declined. And though heifer replacements are higher than estimates for the past three years, they collectively remain lower than any consecutive years since the early 1990’s suggesting "real industry-wide expansion" has yet to be initiated. But perhaps one of the most notable things about the report was that the inventory of beef replacement heifers as a percent of the beef cow herd -- at 18.8% -- was the largest in almost 40 years, including the large expansionary phase experienced in the early 1990’s.

Iowa Cattle Inventory
Iowa’s total cattle inventory was 3.70 million head, down 150,000 head or 3.9% lower than a year ago. The bulk of the decline came from a 40,000 head or 4.3% decline in the number of beef cows. The number of beef cows now stands at 885,000 head. Some of the drop is likely related to the dry pasture conditions that persisted for much of the year. According to USDA/NASS 49% of Iowa pastures were rated as poor to very poor at the close of the productive season in 2013 this is compared to 28% in the Cornbelt region (IL, IN, IA, MI, MN, MO, OH, WI ) and 29% nationally.

Heifers for beef cow replacement in Iowa totaled 150,000 head, unchanged from last year. However, important to note is heifers for beef cow replacement are at or above levels dating back to 1997 (an expansionary phase in the Iowa herd) and the inventory of beef replacement heifers as a percent of the beef cow herd, at 16.9%, was the largest in the history of the data revealing quite explicitly what the industry in Iowa would like to do. The number of cattle on feed in Iowa was 1.9% lower at 1.23 million head. Iowa’s total calf crop in 2013 was 1.02 million head down 30,000 head or 2.9%.

The full version of this article, including descriptive tables and graphs, is available in the February 2014 Iowa Farm Outlook report from Iowa State University