Lowest Cattle Numbers Since 195113 February 2014
US - The annual decline in inventory is likely nearing an end, writes Ron Plain, after analysing the lowest USDA Cattle Inventory Report since 1951.
USDA's annual cattle inventory report for January 2014 showed a continuation in the herd reduction which began in 2007. The bullish news was that the total cattle inventory was down 1.8 per cent . The average of pre-release trade predictions was for a 1.4 per cent smaller inventory. The bearish news was that the 2013 calf crop was down 1.0 per cent . The trade predicted down 2.1 per cent . Cattle prices have been record high in recent months.
Revisions. There were some small revisions to USDA's estimate of the January 2013 cattle inventory. The number of milk cows was lowered by 2,000 head and beef cow numbers increased by 2,000. USDA raised their previous estimate of beef cow replacement heifers by 20,000 head, lowered the number of other (non-breeding) heifers by 15,000 and reduced their estimated number of calves under 500 pounds by 5,000 head.
Total Inventory. The total number of cattle and calves in the U.S. on January 1, 2014, was 87.73 million head, down 1.8 per cent from January 2013 and 9.2 per cent lower than at the last cyclical peak in 2007. This is the lowest January cattle inventory since 1951.
Calf Crop. The 2013 calf crop was estimated to be 33.93 million head, down 1.0 per cent from a year earlier and the smallest calf crop since 1949. This is a smaller decline than implied by USDA's last herd survey which said the number of cows and bred heifers was down 2.1 per cent on January 1, 2013. The size of the calf crop has declined each year since 1995.
Cow Herd. This inventory report indicates the January 1 number of beef cows that have calved (29.0424 million) was 0.9 per cent smaller than on the same date last year. The number of dairy cows that have calved (9.2086 million head) was down 0.1 per cent from a year ago. The combined cow herd is 0.7 per cent smaller than in January 2013.
Replacement Heifers. There were 5.4708 million beef heifers on January 1 being held to add to the cow herd, up 1.7 per cent from a year ago. The number of dairy replacement heifers, 4.5392 million head, was down 0.3 per cent from 12 months earlier. The combined number of replacement heifers is up 0.8 per cent from a year ago.
Cows plus Heifers to Calve. The combined number of cows that have calved (38.251 million) plus replacement heifers expected to calve in 2014 (6.2998 million) is down 0.4 per cent from a year ago at 44.5508 million. This implies the 2014 calf crop will be smaller than the year before for the 19th consecutive year.
Feeder Cattle Supply. At the start of 2014, the number of steers weighing 500 pounds and over was down 2.5 per cent ; the number of 500 pound plus heifers not being held for cow replacements was down 5.0 per cent ; and the number of calves weighing less than 500 pounds was down 3.7 per cent from a year ago. In total, the inventory of feeder cattle was 3.5 per cent smaller than 12 months earlier.
Cattle on Feed. The number of cattle on feed January 1 (12.6953 million) was down 5.0 per cent from a year earlier. The monthly cattle on feed report said the number on feed January 1 in feedlots with a one-time capacity of 1,000 head or more (10.593 million) was down 5.4 per cent . Thus, the number of cattle on feed in feed yards with one-time capacity of 999 head or less (2.1023 million) was down 3.2 per cent from the start of 2013.
Cattle Slaughter Forecast. I expect 2014 fed cattle slaughter to be 3.4 per cent lower than a year ago. The number of cattle on feed January 1 was down 5.0 per cent in total, with the number on feed in feedlots with one-time capacity of 1,000 head or more down 5.4 per cent . Slaughter of cull dairy cows is likely to be down 2.2 per cent compared to 2013. A 9.9 per cent decline in 2014 beef cow slaughter is forecast.
Summary. The U.S. cattle herd is the smallest since 1951. The 2013 calf crop was the smallest since 1949. Lower corn prices should push 2014 feeder cattle prices to a new record level. Inventory numbers imply the January 2015 cattle herd will be close to the year-earlier level. It appears that 2014 fed cattle prices will average over $132/cwt with 2015 prices possibly higher still.
The data from USDA’s January 2014 cattle inventory report is in the table below.
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