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Semi-Annual Cattle Inventory Summary

01 August 2011
Ron Plain
Ron Plain

US - USDA's semi-annual cattle inventory report for July 2011 revealed a continuation in the herd reduction which began in 2006, writes Ron Plain, University of Missouri.

This was expected given that slaughter of cull cows was 4.8 per cent higher during 2010 than in 2009 and 0.7 per cent higher in the first half of 2011 than in January-June 2010. This year's calf crop is expected to be the smallest in over 60 years. Although cattle prices have been strong in recent months, feed prices are high, there is a severe drought in the southern plains, and the weak US economy impacts negatively on cow-calf producers, many of whom rely on off-farm employment.

Revisions. There were two revisions to USDA's previous estimate of the July 2010 cattle inventory. The size of last summer's beef cow herd was revised down by 50,000 head and the dairy cow herd was increased by 50,000 head. The total number of cows was unchanged.

Total Inventory. The total number of cattle and calves in the US on July 1, 2011, was 100.0 million head, down 1.1 per cent from July 2010 and 4.6 per cent lower than at the last cyclical peak in 2006. This is the lowest July cattle inventory since long before USDA started the July inventory series in 1973.

Calf Crop. The 2011 calf crop is estimated to be 35.5 million head, down 0.5 per cent from a year earlier and the smallest calf crop since 1950. This is a smaller decline than implied by USDA's last herd survey which said the number of cows and bred heifers was down 1.3 per cent on January 1, 2011. The size of the calf crop has declined each year since 1995.

Cow Herd. This inventory report indicates the July 1 number of beef cows that have calved (31.4 million) was 1.1 per cent smaller than on the same date last year. The number of dairy cows that have calved (9.2 million head) was up 0.5 per cent from a year ago. The combined cow herd is 0.7 per cent smaller than in July 2010.

Replacement Heifers. There were 4.2 million beef heifers on July 1 being held to add to the cow herd, 4.5 per cent fewer than on July 2010. The number of dairy replacement heifers, also 4.2 million head, was up 3.7 per cent from 12 months earlier. The combined number of replacement heifers is down 0.6 per cent from a year ago.

Feeder Cattle Supply. At the start of July, the number of steers weighing 500 pounds and over was down 1.4 per cent; the number of 500 pound plus heifers not being held for cow replacements was down 1.9 per cent; and the number of calves weighing less than 500 pounds was down 1.1 per cent from a year ago. In total, the inventory of feeder cattle was 1.3 per cent smaller than 12 months earlier.

Cattle Slaughter Forecast. For all of 2011, I expect fed cattle slaughter to be 0.4 per cent lower than a year ago. During the first half of 2011, steer and heifer slaughter was up 0.7 per cent. The number of cattle on feed July 1 was up 2.5 per cent in total, with the number on feed in feedlots with one-time capacity of 1,000 head or more up 3.8 per cent. There is one fewer slaughter day in the fourth quarter this year. Slaughter of cull dairy cows is likely to be up 2.9 per cent compared to 2010. A 2.3 per cent decline in 2011 beef cow slaughter is forecast.

Summary. Inventory numbers imply the January 2012 cattle herd will be roughly 1 per cent smaller than the year-earlier number. The combined number of cows and replacement heifers is 0.7 per cent smaller than on July 1, 2010, implying a smaller calf crop in 2012 for the 17th consecutive year. Lower inventories should mean stronger prices. It appears that 2011 fed cattle prices will average over $110/cwt with 2012 prices higher still. High corn prices should hold 2012 feeder cattle prices close to this year's level. Through May, beef exports were 27 per cent above year-ago levels. As expected during a worldwide recession, meat demand was soft in 2009 and early 2010. If the economy grows, then beef demand should improve. Demand for slaughter steers and heifers was up over 10 per cent during the first half of 2011 compared to a year earlier. The strengthening income picture for cow-calf operations should slow beef cow slaughter and eventually lead to herd expansion.

The data from USDA's July 2011 cattle inventory report is in the table below.

Inventory of Cattle and Calves, July 1, 2009-2011
  2009 2010 2011 11 as per cent of 2010
  --------- 1,000 head ----------  
Cattle & Calves 102,000 101,100.0 100,000.0 98.9
Cows & Heifers that Have Calved 41,400 40,900.0 40,600.0 99.3
---Beef Cows 32,200 31,750.0 31,400.0 98.9
---Milk Cows 9,200 9,150.0 9,200.0 100.5
Heifers 500 Lbs. & Over 16,200 16,200.0 16,000.0 98.8
---For Beef Cow Replacement 4,500 4,400.0 4,200.0 95.5
---For Milk Cow Replacement 3,950 4,050.0 4,200.0 103.7
---Other Heifers 7,750 7,750 7,600.0 98.1
Steers 500 Lbs. & Over 14,400 14,400 14,200.0 98.6
Bulls 500 Lbs. & Over 2,100 2,100.0 2,000.0 95.2
Calves Under 500 Lbs. 27,900 27,500.0 27,200.0 98.9
Calf Crop 35,939 35,684.8 35,500.0 99.5
Cattle on Feed 11,600 11,900.0 12,200.0 102.5

Actual federally inspected cattle slaughter and prices for 2008, 2009 and 2010 along with our forecasts of slaughter levels and prices in 2011 and 2012 are given in the table below.

  Federally Inspected Slaughter Nebraska --Oklahoma City--
  Beef Cows Dairy Cows Slaughter Steers 750-800# Feeder Steers 500-550# Feeder Steers
Quarter —------thousand head------- --------dollars/cwt--------
Q1 08 6514.0 817.7 665.1 89.59 99.88 121.75
Q2 08 7265.7 901.8 594.7 92.83 106.60 122.19
Q3 08 6982.6 908.8 658.2 98.45 110.81 122.85
Q4 08 6277.5 940.9 673.3 88.22 94.62 105.22
2008 27040.0 3569.3 2591.2 92.27 102.98 118.00
Q1 09 6159.7 781.9 762.5 80.98 92.83 110.03
Q2 09 6866.5 770.2 682.8 84.53 98.63 116.09
Q3 09 6704.4 818.6 703.2 82.78 99.40 107.87
Q4 09 6324.1 954.3 667.0 82.43 93.67 109.31
2009 26054.8 3325.0 2815.3 82.68 96.13 110.83
Q1 10 6329.5 847.6 711.0 87.93 98.73 118.01
Q2 10 6812.1 910.3 658.1 96.59 112.65 130.93
Q3 10 6886.9 871.1 700.0 95.59 112.29 124.04
Q4 10 6614.7 1000.9 737.5 100.01 111.15 125.16
2010 26643.2 3629.9 2807.1 95.03 108.71 124.54
Q1 11 6445.0 815.0 781.0 110.48 127.20 147.12
Q2 11 6794.0 896.0 677.0 114.07 131.08 146.61
Q3 11* 6840.0 865.0 710.0 110-113 130-136 135-145
Q4 11* 6460.0 970.0 730.0 113-118 128-135 130-140
2011* 26539.0 3546.0 2898.0 111-115 128-132 140-145
Q1 12* 6350.0 810.0 740.0 116-121 127-132 145-155
Q2 12* 6690.0 885.0 685.0 118-123 130-135 145-155
Q3 12* 6650.0 845.0 710.0 113-118 130-140 135-145
Q4 12* 6430.0 965.0 740.0 118-123 130-140 130-140
2012* 26120.0 3505.0 2875.0 116-120 129-135 139-149

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