Beef Cattle Inventory

[Logan52]

On Friday the USDA reported the lowest beef cow inventory on record. They also reported the 2nd lowest cattle inventory and the 3rd lowest beef calf inventory on record.
Any thoughts on what this means for the beef cattle industry? How about its effect on sales barns and how they operate? Is this good or bad for the long term outlook for the industry?

I think some way has to be discovered to allow small beef cattle herds of 20 to 30 cows to make money consistently. If not, we are going to become more like the chicken and hog industries and beef may become a premium product and a smaller part of the American diet.

 

[Travlr]

On Friday the USDA reported the lowest beef cow inventory on record. They also reported the 2nd lowest cattle inventory and the 3rd lowest beef calf inventory on record.
Any thoughts on what this means for the beef cattle industry? How about its effect on sales barns and how they operate? Is this good or bad for the long term outlook for the industry?

I think some way has to be discovered to allow small beef cattle herds of 20 to 30 cows to make money consistently. If not, we are going to become more like the chicken and hog industries and beef may become a premium product and a smaller part of the American diet.

Conspiracy theory time...

I've begun to wonder if all the hype about cattle producing methane, and all the lunacy from animal rights advocates, are addling the brains of the powers that be. They are certainly one way thinkers, not even considering if there are two sides to the arguments.

Is the federal government secretly spending money to buy down the herds? Some kind of incentive program to buy productive cows?

If you think that's a little out there... I would have agreed ten years ago. But with the very odd things going on in Sri Lanka and the Netherlands, as well as some other places, I'm entertaining ideas that once seemed fantastic.

 

[Dsth]

I have about 30 cow/calf herd right now. plan to retire in a year or two, so if calf prices are as high as what I have seen lately, it will be a good thing for me. Hard to say what will happen when drought areas start getting rain again. herd rebuilding will take a few years and will reduce feeder heifer availability. I think the cow/calf operations will do fine the next few years but feedlot operators may have a harder time making ends meet.

 

[kenny thomas]

If its like here there is 3 times the number of cows going to slaughter as a year ago. Many cows that are bigger and would normally go back to the farm, or never been brought to the stockyard to begin with, are going to slaughter. At 1.00 to 1.20 a lb many cows will continue to be slaughtered. This means even less calves born next year.
Its also hard to retain a 600lb heifer calf when it brings $1300-$1400 or more at weaning.

 

[GoWyo]

When prices sucked there were too many cattle and packers had the leverage over feeders and Cow-Calf sectors. Now packers are having to pay so they are looking for leverage, including killing less numbers to pull prices down. When feed is short and high priced and heifer calves are worth decent money, there is little incentive to expand or to even hold cow herd size steady.

 

[Ebenezer]

More imports

 

[kenny thomas]

More imports

Im afraid that's exactly what will happen. And then labeled as a product of the US.

 

[Logan52]

Where are all the cows coming from that are going to slaughter? Something out of the normal appears to be going on.
I sure am glad I am not a conspiracy theorist.

 

[kenny thomas]

Where are all the cows coming from that are going to slaughter? Something out of the normal appears to be going on.
I sure am glad I am not a conspiracy theorist.

The high prices are getting people to cull heavier. Look at the prices and numbers in your area.
Not exactly your area but close. Somerset KY sale Saturday.

 

[Logan52]

You are right about the situation at the Stanford and Richmond yards where I frequent. With hay short, I am tempted to join the parade of cows headed east and south.
Imports can ease the need for hamburger, but what about rib eyes?
I remember the dollar a pound weaned calves of 1972 and the frenzy of 2014, but this seems different and industry changing.

 

[kenny thomas]

I also remember buying 350lb graded heifer calves in the early 90's for .34.
Stay current with sales is my advice. If a cow needs selling then sell

 

[kenny thomas]

I gave over $3.20 a pound for some 350lb steers in 2014. Highest i gave Saturday i think was 2.40. So still a ways to go.

 

[Logan52]

Yeah, I sold steer calves for $1.10 in the fall of 1972 and in the fall of 1973 sold some of the best BWF heifers i ever raised for 25 cents. They were a little fleshy and a little short for today's market but nice.
That sale still hurts after all these years.

 

[Djm961]

I am not buying into any conspiracy theories. Prices haven't been great when compared to input prices, so I imagine a lot of people are holding off on growth. Last year the west/ southwest had a bad drought and now it has moved to the Midwest. Makes growing the nation's overall herd pretty difficult.

Heck a neighbor not too far away was offered $250 per acre on his hill ground for crops. If someone offers me that, the cows may be a thing of the past. I can't make that much per acre running my own cows on my land.

 

[Brute 23]

Where are all the cows coming from that are going to slaughter? Something out of the normal appears to be going on.
I sure am glad I am not a conspiracy theorist.

In our area people are getting out and staying out. Dry conditions and high prices are incetivizing people to cash in their chips. We had a wet spring and there were constantly still have big herd sepl outs. Good for them, I hope they enjoy their money while they can.

People need to learn from the Saudis. More is not always better. Run conservative numbers and keep the price per lb up. Overstocking never pays. 20-30 head should probably be more like 10-15.

 

[sstterry]

If its like here there is 3 times the number of cows going to slaughter as a year ago. Many cows that are bigger and would normally go back to the farm, or never been brought to the stockyard to begin with, are going to slaughter. At 1.00 to 1.20 a lb many cows will continue to be slaughtered. This means even less calves born next year.
Its also hard to retain a 600lb heifer calf when it brings $1300-$1400 or more at weaning.

I sent a load last week and did not retain any heifers. It was just too hard to pass up the prices. I spoke to a former principal from here that has a farm in Hancock County Saturday night and he was telling me the same thing about Beef inventories. I think the droughts and low prices have driven a lot of folks out of the business the past few years.

 

[Dave]

It happens. Drought, low prices, high hay prices, etc and people sell out. Calf prices hit $4.00, bred cows hit $4,000 and everyone will hold back every heifer they can get their hands on. For one or two years it will be a gold mine. Everyone who sold out there will be people lined up wanting to lease their pasture. Then the bubble will burst. Some people will loose their shirt. Others will have been smart. Paid off debt and not got over extended.

 

[Dave]

People remember 2014. 2013 was pretty darn good too. As was 2015 until about July when the bottom fell out. I came out smelling like a rose in 2015 because I contracted the cattle in May. I have a feeling we are in 2013 mood. But I am seriously thinking next year and most certainly the following year that LRP or early contracting will be a smart move.

 

[Brute 23]

We have been dry for quite a few years now. I made some deep cuts early on so our herd is pretty young as a whole. The upper end is 6-8 with very few 10s.

That has played well with this market as there is very little need to keep heifers. It has to be a real stand out for me to keep and that is just to fill in for natural attrition.

Those deep cuts continue to pay dividends. Less feed, better pasture, younger herd, only keeping the best of the best vs trying to fill gaps... lean and mean.

 

[kenny thomas]

I have posted this before but think this is a good time to repeat it.
A heifer kept during the high price part of the cattle cycle. Usually 10-11 years, will never be as profitable as one kept in the low price part of the cycle.

Example, a 600lb calf kept this fall will be bred next year and calve the next year. So her first calf, which is usually not the best one she will have, would sell the fall of 2025. The best part of her production will be at least 5 years from now during the low part of the price cycle.

A calf kept during the low price part of the cycle will be the most profitable during the high price part.

Sell heifers now and next year and get the profit you have been working for.
Keep heifers when they are cheap.