TheBeefSite.com - news, features, articles and disease information for the beef industry

News

CME: USDA to Release Cattle Survey

24 July 2009

In addition to the monthly cattle on feed estimates and the actual production figures for June, USDA on Friday will also release the results of its semi-annual survey of US cattle operations, reports the CME Livestock report.

The survey will provide a measure of total cattle inventories as of July 1 as well as estimates of the number of cows, steers, and heifers in farms and feedlots at the mid point of the year.

The July report also provides the first estimate of the number of calves born (calf crop) in 2009. It is an important statistic as it offers some perspective about the number of animals coming to market not tomorrow, not six months from now but in 2011 and beyond.

A survey of analysts conducted by Reuters (full survey on page 2) shows that on average they expect the 2009 calf crop to be down 2.2 per cent from the previous year, following a similar decline in the year prior. Fewer cows give birth to fewer calves, eventually leading to fewer animals going to slaughter.

The cattle industry is limited in how it can increase productivity, the only real option is to increase the size of animals going to market. Other than that, it still takes nine months for a cow to give birth to one calf at a time (sometimes two) and then many long months until it is ready for market.

The number of heifers held back for cow replacement today will not be able to affect supplies until years in the future. As the bottom chart to the right shows, the July 1 report is expected to show that we have yet to see a herd rebuilding impetus in the US beef industry.

Higher feed costs and weak beef demand (both in domestic and export markets) have left cow-calf producers with little choice but to continue to reduce the size of their operations and throughput. The number of heifers held back for beef cow herd replacement (the mothers of future calves) is estimated to be down 2.2 per cent in the July count.

The beef cow herd is also expected to be down 2.1 per cent. If the experience of the last 20 years or so is any guide, it shows that the cattle cycle has become one long liquidation process interrupted by only a few brief rebuilding years - clearly not a picture of a growing industry. And unless the industry is able to get paid more of its beef, there is little reason to expect cattle numbers and beef production to pick up anytime soon. On Wednesday, USDA also released its monthly survey of public refrigerated warehouses.

On page 2 we have included a summary of the results as they pertain to livestock and poultry. Markets clearly read as bearish the fact that pork supplies at the end of June were 9.2 per cent higher than the already large supplies of a year ago and 27.1 per cent higher than the five year average.




Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


TheCattleSite News Desk


Our Sponsors

Partners


Seasonal Picks

Animal Welfare in EPS - 5m Books