Markets
Update on the Cattle Cycle: What’s Next?
By Derrell Peel, Oklahoma State University extension
The January 1, 2019 inventory
of all cattle and calves in the
U.S. grew to 94.76 million,
head, up 0.5 percent from
one year ago. This puts the
number of cattle in the country
just slightly higher than 2009
levels after dropping to a low
of 88.53 million head in 2014,
with an increase of 6.23 million
head in the last five years.
The inventory of beef
replacement heifers was 5.93
million head, down 3.0 percent
from the previous year. Beef
replacement heifers as a percent
of the beef cow herd on January
1, 2019 was 18.7 percent. This
ratio is down from 19.4 percent
one year ago as heifer retention
moves closer to levels consistent
with zero herd growth. A record
heifer retention level occurred
The inventory of beef cows on
in 2016 with beef replacement
January 1 was 31.77 million
heifers at 21.0 percent of the
head, up 1.0 percent year
beef cow herd. Over the past
over year. The 2018 beef cow
30 years this ratio has averaged
inventory was revised down
17.8 percent. Dairy replacement
to 31.47
heifers were
T
he
larger
2018
calf
crop
and
million head,
down 1.4
resulting increase in estimated percent to 4.70
meaning
feeder supplies mean that
that beef
million head on
feedlot production will remain January 1, 2019.
cow herd
higher in 2019 leading to
growth in
increased beef production ...
2017 was 0.8
On January
percent. The
1, 2019, the
beef cow herd on January 1,
number of cattle on feed in the
2019 is nearly equal to the 2009
U.S. was 14.37 million head, up
level of 31.79 million head and
1.6 percent year over year. The
has increased by 2.68 million
inventories of steers (over 500
head from the 2014 low of
pounds); other heifers (over
29.09 million head. The dairy
500 pounds); and calves (under
cow herd was 9.35 million head
500 pounds), adjusted for the
on January 1, 2019, down 0.8
cattle on feed inventory, results
percent year over year. Beef and
in the estimated feeder cattle
dairy cows combined for a total
supply outside of feedlots. For
cow herd of 41.12 million, up
January 1, 2019, this estimate
0.5 percent from last year. The
was 26.38 million head, up
2018 calf crop was 36.40 million
1.0 percent year over year.
head, up 1.8 percent from 2017.
“
”
This latest data provides several
indications for the coming
year. The larger 2018 calf
crop and resulting increase in
estimated feeder supplies mean
that feedlot production will
remain higher in 2019 leading
to increased beef production
again in 2019. The slightly
larger 2019 cow herd implies
than the 2019 calf crop will be
as large or slightly larger year
over year and will maintain
feeder supplies through 2020.
It appears that herd expansion
is nearly over although the level
of beef replacement heifers
is large enough to support a
minimal level of additional herd
expansion in 2019. While cyclical
expansion may be mostly
complete, there is no indication
of herd liquidation at this
time. Average cattle prices are
expected to continue at current
levels and seem likely to hold
cattle numbers steady in 2019.
Future market conditions, good
or bad, could prompt additional
expansion or liquidation in 2020
and beyond. Producers should
continue to monitor domestic
and international market
conditions to see what new
cattle market direction emerges
in the coming months. I
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