25th: Cattle Markets Can Recover
Lower cattle prices
have been the story this spring and summer. Beef supply has been large
due to heavy placements of heavy calves and the beginning of more females
coming to market as herd expansion may be slowing. Retail beef prices have
been slow to come down and this has limited consumer purchases of beef
in relation to abundant pork and poultry supplies.
Finished cattle prices
have been on the skids since mid-March when prices reached near $140 per
hundredweight. By last week, prices had fallen to around $115. Noticing
the bearish theme in the cash market, the futures market has suggested
prices will drop another $5 by the end of this year and proceed downward
to near $100 by next summer.
There are plenty
of reasons why prices have fallen, the biggest being a large number of
cattle coming out of feedlots in recent months. That story goes back even
further to abundant grass which encouraged cow-calf operations and backgrounders
to add more weight to calves before they entered the feedlot. As a result,
there has been a shift to heavier weight placements. In the first half
of this year, placements weighing 800 pounds and more represented a record
40 percent of all placements, compared to a longer-term average around
of heavy calves meant that marketings were going to rise sharply. Marketings
out of feedlots were up five percent in May and then up a sharp ten percent
in June. Contributing to higher recent marketings has been a shift to lower
slaughter weights since May which has served to "pull cattle forward."
This shift to lighter weights is probably related to the falling finished
cattle prices and the desire of feedlot managers to get cattle to market
before prices dropped even more.
Because of these
heavy marketings, beef production was up five percent in May and ten percent
in June compared to the same month in the previous year. The rapid marketings
in recent months has reduced the total number on feed to just one percent
higher than year-ago according to USDA. This should help ease the burdensome
volume of cattle and encourage upward price movement.
There are early signs
that the expansion phase of this cattle cycle could be in the process of
slowing. Lower finished cattle prices and extremely weak futures prices
may be causing cattle producers to re-think any additional expansion plans.
The calf prices implied by $100 finished cattle is simply not profitable
for most cow-calf operations. If producers slow the rate of expansion,
then this means more females move to market providing added beef supply
pressures to already declining cattle prices.
The signs of slowing
expansion are in the rate of increased female slaughter. In June, the number
of heifers processed was up relative to year previous levels for the first
time in several years. In addition, the number of beef cows processed in
both May and June was up about 18 percent. For June, total females (heifers
and all cows) processed were up 7 percent compared to year earlier numbers.
The total number
of females in the processing mix remains low, so it is still too early
to say this expansion phase has come to an end. However, these signs of
higher numbers of females in the processing mix may be the first clues
of what is to come.
Retail beef prices
have been slow to fall as much as needed to encourage consumers to buy
the added beef supplies. In June, USDA reported the composite retail beef
price was $6.20 per pound. This compares to a record high price of $6.41
per pound in May of 2015. Thus, recent retail prices were just three percent
lower than the record high. In contrast, June retail pork prices were down
11 percent from their high.
Farm level prices
normally drop quickly, but retail prices are much slower to decline. This
means the current margin between the farm price and the retail price is
at a record wide level. Packer margins are likely at record high levels
as well. As retail prices adjust downward over time, consumers will have
more price incentives to buy beef and this could actually help strengthen
farm level prices.
With the number of
cattle on feed only up one percent on July 1, there should be renewed hope
for recovery in cattle prices. The fact that marketing weights have come
down is also an encouragement that feedlot managers are more current in
their marketings. In addition, over coming months, retail beef prices should
also come down which will serve to narrow packer margins, but improve farm
Prices of finished
cattle are expected to be in the mid-to-higher teens in the third quarter
then move upward to the high teens to low $120's this fall.
Recent live cattle
futures prices have been extremely depressed, sending signals of much lower
cash prices next year. While prices are expected to be lower next year,
they may not be as low as suggested by futures. Still, cow calf managers
will want to continue to be cautious about further expansion of the brood
Chris Hurt -- Purdue
25th: Closing Futures Summary
Live cattle futures closed $2.42 1/2 to
the $3.00 limit higher in the front three contracts. Trading limits expand
to $4.50 for Tuesday. Live cattle futures gapped higher in reaction to
the friendly Cattle on Feed Report released by USDA Friday. The strong
opening triggered buy stops, driving prices still higher on short-covering.
The surge ignored this morning's continued slide in wholesale beef prices.
Choice boxed beef fell $1.43 and Select slipped 17 cents. But movement
was solid at 80 loads, hinting that the price plunge may be attracting
more retailer buying.
Corn futures settled
fractionally lower, finishing midrange after spending much of the morning
trading lower. For the second trading session in a row, funds were net
even for the day. A less-threatening weather scenario sent traders to the
sell side in the day session. Rains appeared over the weekend with more
sweeping across the southern Corn Belt from Kansas/Missouri eastward to
Lake Erie. Generally favorable weather conditions are expected into early
Soybean futures settled
22 to 22 3/4 cents lower through the January contract. March through August
contracts ended 25 3/4 to 27 1/2 cents lower. That was in the lower end
of today's range, but off session lows. Soybean futures were pressured
by weather as forecasts signal non-threatening conditions will be seen
into early August. With next month being the make or break month, traders
used the weather outlook as a reason to further lighten long positions.
Wheat futures closed
mostly 4 to 8 cents higher in winter wheat markets, while spring wheat
futures were 1 to 2 cents higher. Wheat futures bucked the trend and traded
higher today, ignoring weakness in the soybean and corn markets. Support
for wheat's price strength came from concerns with the European wheat crop
amid heavy late-season rains. In addition, the U.S. dollar was weaker today.
That combination was enough to encourage short-covering in wheat futures.
It was a two-sided
day of trade in the hog market. In the end, hog futures settled with gains
of 40 to 77 1/2 cents through the January contract. Hog futures were supported
by heavy spillover from the cattle market, though that wasn't the case
for the entire day. In fact, hog futures traded lower for much of the day
on pressure from the cash hog market, but firmed late on spillover support.
22nd: National Feeder & Stocker Cattle Summary
Dept of Ag Market News
Auctions Direct Video/Internet
Compared to last
week, feeder steers and heifers sold mostly steady with instances of 3.00
lower to 3.00 higher. The real summer heat moved in this week as
we hit the dog days of summer, with extremely hot and humid weather curtailing
receipts across much of cattle country, including some major auction barns.
It’s difficult and dangerous for both man and beast to move cattle in such
conditions. Heat stress and weight loss make handling and transporting
cattle very unappealing and the risk of death loss skyrockets when the
heat index is so high.
Demand was still
good for the cattle that did make it town even as the cash market remained
under pressure. Cattle futures were extremely volatile with nearly
all months hitting contract lows throughout the week but as has been proven
over and over, strong fundamentals no longer have any sway over futures
activity. The bulk of this week’s fat cattle trade was pretty much
wrapped up on Wednesday, with live sales mostly 2.00 lower at 115.00-115.50
(for extended delivery) and dressed sales 2.00 lower as well, 184.50-186.00,
the lowest prices seen in four years.
It has been frequently
discussed that negotiated sales make up only a small percentage of fat
cattle sales as so much of the packers supply is already captive.
The lack of competition this creates really hurts slaughter cattle trade
as packers simply don’t have huge needs to fill anymore. Last week’s
slaughter numbers ended up being larger than expected at 594,000 head.
July kill levels have been huge because it was profitable for the packer,
and the weekly kill will stay high as long as packer margins remain positive.
Fundamentally, this will help feedlots stay current and at some undetermined
point will mean a better fat market. Instead of feeding cattle too
long like many feedlots did last summer, many are now pulling green cattle
As expected, boxed
beef made new lows for the year but since packers are still enjoying impressive
margins, seasonally weaker box prices aren’t an issue so long as their
supply is replaced at lower prices. The high heat that was discussed
earlier in this report also hurts demand at the meat counter, and with
lots of beef in the channel, prices at the supermarket will have to stay
competitive with other proteins to keep beef cuts moving. It is generally
hard to find much optimism for the beef complex in July, but one bit of
positive news for the feeder market this week was Monday’s Crop Progress
Report which rated 76 percent of the nation’s corn and 71 percent of beans
in good to excellent condition.
Hot weather and timely
rains have worked together to create what is expected to be another outstanding
crop. The monthly Cattle on Feed report has not yet been released
at the time of this report but analysts expect placements and marketings
to be well over year ago levels. No surprises there, but a larger
number of heifers on feed is also expected, showing that herd expansion
is slowing. Moving forward, increased marketing levels will be critical
to maintain feedlot currentness as feeder cattle supplies are expected
to be very heavy this fall. Auction volume this week included 54
percent weighing over 600 lbs and 36 percent heifers.
22nd: Cattle on Feed Report
Cattle on Feed Up 1 Percent
Cattle and calves
on feed for the slaughter market in the United States for feedlots
with capacity of 1,000 or more headtotaled 10.4 million head on July 1,
2016. The inventory was 1 percent above July 1, 2015. The inventory
included6.87 million steers and steer calves, down 1 percent from the previous
year. This group accounted for 66 percent of thetotal inventory. Heifers
and heifer calves accounted for 3.49 million head, up 5 percent from 2015.
feedlots during June totaled 1.53 million head, 3 percent above
2015. Net placements were 1.46 million head. During June, placements of
cattle and calves weighing less than 600 pounds were 290,000 head, 600-699
pounds were 255,000 head, 700-799 pounds were 340,000 head, and 800 pounds
and greater were 640,000 head.
fed cattle during June totaled 1.91 million head, 9 percent above
totaled 61,000 head during June, 12 percent below 2015.
Feed Inventory in 1,000+ Capacity Feedlots as of July 1st
Millions of Head
Cattle Placed on Feed in 1,000+ Capacity Feedlots in June
Millions of Head
Cattle Marketed from 1,000+ Capacity Feedlots in June
Millions of Head
Feed by State as of July 1st
22nd: Shootin' the Bull Weekly Analysis
|In my opinion, I
anticipate fat cattle futures to begin moving higher. The new contract
low this week leads me to perceive that traders have begun to push futures
to levels that would be construed as exceptionally under valued were the
cash market to trade to these levels. Traders have been brazen with
their selling this week. This may come to a quick end as the on feed
report continues to show excellent movement of inventory with persistent
draws in cold storage. The lower than guessed placement figure is
anticipated to lend support to the October contract. On Monday, I
will look for an opportunity to buy the October contract.
I anticipate feeder
cattle futures to begin moving higher as well. While the fall calf
crop is anticipated to be larger, the number of available feeder cattle
may not be as plentiful. The movement into feed yards has been steady
and at elevated levels. This is anticipated to keep the pipeline
flowing. I would not be quick to sell or hedge on the first bounce
up. Feed yards are urged to use options to lock in purchases for
October placements. While I do not anticipate a roaring bull market
to start, I do anticipate prices to begin gravitating higher as the industry
is working exceptionally hard to find equilibrium.
Corn is anticipated
to have made a 5th wave low this week. While my aspirations of $5.00
corn have long been shot to pieces, a retracement of the entire decline
from this summers high is anticipated. Therefore, a 50% retracement
of the decline would lead me to anticipate a trade of December up to $3.91.
Swift is a commodity broker and consultant with Swift Trading Company
in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle
comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com
investment in futures contracts is speculative, involves a high degree
of risk and is suitable only for persons who can assume the risk of loss
in excess of their margin deposits. You should carefully consider
whether futures trading is appropriate for you in light of your investment
experience, trading objectives, financial resources and other relevant
circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE
22nd: USDA Cold Storage Report
As of June 30th:
Total red meat
supplies in freezers were down 2 percent from the previous month and down
6 percent from last year.
Total frozen poultry
supplies were up 5 percent from the previous month and up 11 percent from
Total pounds of beef
in freezers were up 1 percent from the previous month but down 5 percent
from last year.
Frozen pork supplies
were down 5 percent from the previous month and down 8 percent from last
year. Stocks of pork bellies were down 19 percent from last month but up
42 percent from last year
Total stocks of chicken
were up 1 percent from the previous month and up 12 percent from last year.
Total pounds of turkey
in freezers were up 11 percent from last month and up 9 percent from June
21st: June USDA Monthly Livestock Slaughter Report
Record High Red
Meat Production for June
June 2015 contained
22 weekdays (including 0 holidays) and 4 Saturdays.
June 2016 contained
22 weekdays (including 0 holidays) and 4 Saturdays.
Commercial red meat
production for the United States totaled 4.23 billion pounds in June, up
5 percent from the 4.02 billion pounds produced in June 2015.
Beef production, at
2.19 billion pounds, was 10 percent above the previous year. Cattle slaughter
totaled 2.71 million head, up 10 percent from June 2015. The average live
weight was up 3 pounds from the previous year, at 1,335 pounds.
Veal production totaled
6.4 million pounds, 8 percent below June a year ago. Calf slaughter totaled
37,600 head, up 7 percent from June 2015. The average live weight was down
45 pounds from last year, at 291 pounds.
Pork production totaled
2.01 billion pounds, up 1 percent from the previous year. Hog slaughter
totaled 9.57 million head, up 1 percent from June 2015. The average live
weight was down 2 pounds from the previous year, at 280 pounds.
January to June 2016
commercial red meat production was 24.4 billion pounds, up 3 percent from
2015. Accumulated beef production was up 5 percent from last year, veal
was down 7 percent, pork was up 1 percent from last year, and lamb and
mutton production was up slightly.
Lamb and mutton production,
at 13.2 million pounds, was down 2 percent from June 2015. Sheep slaughter
totaled 195,200 head, slightly above last year. The average live weight
was 135 pounds, down 3 pounds from June a year ago.
June Federally Inspected
(FI) cattle slaughter was the largest for the month since 2013. The majority
of the increase in slaughter came from an increase in FI steer slaughter,
which was up 12% (up 167,000 head) year-over-year and the largest for June
since 2011. FI heifer slaughter was also up year-over-year, but to a lesser
extent of 5% (up 28,000 head) compared to 2015. Heifer slaughter in June
was still below 2014 levels though.
Cow FI slaughter
also increased compared to last year, up 10% (up 40,000 head), with almost
all of the increase coming from beef cow slaughter. For the first half
of the year, FI heifer slaughter was actually down 2% (down 82,000 head)
and beef cow slaughter was up 8% (or up 95,000 head). Four consecutive
quarters of declines in calf prices so far are not enough to induce a significant
increase in female cattle slaughter.
20th: A Mid-Year Review of Production & Prices
Looking back at the
first six months of 2016 the one word summary for beef production is “growing”
compared to a year ago, especially during May and June. The first
term that immediately comes to mind regarding cattle prices is “volatile”,
especially in futures markets. A close second price descriptor was
For the first six
months of 2016, U.S. beef production was 5.2% above 2015’s. At 12.1
billion pounds, that was the largest tonnage for January-June since 2013’s.
Both cattle slaughter (up 4.3%) and dressed weights (rising 0.9%) posted
year-over-year increases. Most of the year-over-year gain in cattle
slaughter came from steers and heifers (up 4.7%). Cow slaughter also
increased, rising about 3.5% compared to 2015’s; most which was in beef-type
animals rather than dairy-type.
Increased beef production,
lackluster exports, and large processor margins have translated into lower
cattle prices in 2016, as would be expected. The USDA’s Agricultural
Marketing Service Market News (AMS) negotiated 5-market average slaughter
(fed) steer reported prices for the first six months of this year averaged
just over $131.00 per cwt. compared to a shade above $160.00 last year,
as drop of 18%. Lower fed cattle prices combined cattle feeders adapting
their feeder cattle price bids after record large losses in 2015 to pressure
yearling and calf process. AMS reported auction prices for 700-to
800-pound steers in the Southern Plains to plummet 30% year-over-year in
the first half of 2016. Southern Plains prices for 500-to 600-pound
steers in January through June averaged 33% below 2015’s.
Estimating per capita
beef disappearance for the first half of 2016 is instructive, even if we
need to use some estimates, most importantly beef imports and exports.
Here we will use the LMIC’s estimates. On a per person basis, beef
disappearance domestically in January-June 2016 was about one pound above
a year earlier. That’s not a huge increase, but the amount (27.6
pounds calculated on a retail weight equivalent basis) was the largest
since 2013’s. Of course, to increase disappearance domestically generally
requires a lower price. Also, given weak world economic conditions,
trade barriers, etc., during the last two years the export tonnage that
was achieved required lower prices.
The LMIC forecasts
U.S. commercial beef production in calendar year 2016 at about 24.7 billion
pounds, up 4% to 5% year-over-year and the largest since 2013’s.
In 2016’s last 6 months, production is forecast to rise 3% to 4% year-over-year.
As the second half of 2016 progresses, year-over-year declines in cattle
prices are forecast to moderate. As the year wraps-up, the fed steer
price could match or slightly exceed the depressed level of late 2015.
Yearling and calf prices are expected to remain below 2015’s through year-end.
U.S. TOTAL RED
MEAT AND POULTRY PRODUCTION
For the first six
months of 2016, domestic production of red meat and poultry was larger
than posted in any prior year. The prior record was set in 2008.
However, the rate of change year-over-year is the important market driver
not the absolute level; the year-over-year increase for the first half
of this calendar year was 2.9%. For the 20 year period beginning
in 1989 through 2008, record large U.S. total red meat and poultry production
for the first six months of the year occurred 17 times.
As usual in recent
decades, U.S. chicken production had the largest production level; Ready
to Cook (RTC) production for January-June of this year was nearly 20.3
billion pounds, 2.9% above the same timeframe in 2015. Next was pork
at 12.2 billion pounds (carcass weight), followed closely be beef at 12.1
billion pounds. Note this is a record level of pork production in
the U.S. for the January to June timeframe. Importantly, the year-over-year
gains in pork and beef tonnage were 0.9% and 5.2%, respectively.
U.S. turkey production was about 2.9 billion pounds and has been recovering
from the Avian Influenza caused reductions last year and was 3.1% above
2015’s for the first six month of 2016. At about 77 million pounds,
commercial lamb production in January-June was essentially unchanged from
a year ago, while veal dropped (down 6.9% year-over-year) to 37.4 million
As we did in the
prior article on beef, we now shift to calculating per person disappearance
of red meat and poultry for the first six months of this year. Using
LMIC’s projections on imports and exports for June, estimated per person
disappearance on a retail weight basis was 105.6 pounds. That was up 3
pounds from 2015’s and the largest since 2008 (108.2 pounds). So,
even though production was record-large, product available per person in
the U.S. was not. Note that people don’t actually eat nearly that
much per person because of three major factors: 1) purchased weight (retail)
includes bones; 2) use by family pets is included (purchased meat and poultry
in pet foods/meals); and 3) waste (uneaten food). Of course, the
estimated retail weight disappearance also is a pre-cooked amount.
19th: Retail Beef Prices Drop Slightly
June average retail meat prices on Friday
Retail prices are
calculated from a very limited number of retail cuts, for each protein,
using several assumptions by USDA-ERS (those cut prices are collected
by the Bureau of Labor Statistics to calculate the U.S. consumer price
index). Due to the nature of these calculations and the retail environment,
people tend to call these average retail prices “sticky” meaning,
as the fundamental live animal and wholesale markets change, the
retail price changes are slower to appear. Additionally, to
take beef for example, no consumer buys “beef”, they buy steak, or
hamburger, or roasts, etc. To average all of these prices together
to get one value for beef can be misleading, however these retail
prices are still useful as a barometer to the industry.
Starting out with
retail beef prices, the June average All Fresh Beef price was $5.83 per
pound. This was $0.27 per pound below a year ago (down 4%).
Within the monthly retail meat prices, roasts and ground beef have
experienced the most decline year-over-year, all down over 6%.
Steak cuts were only down 1%-3% year-over-year. This is supportive
of beef cutout data and weekly wholesale price levels.
Retail beef prices
are moving in a seasonally normal pattern and we expect them to slowly
increase into fourth quarter, but stay below year ago levels.
On the pork side,
retail prices were actually up year-over-year for June. Looking
back on last year though, retail pork prices experienced a seasonally
abnormal decrease from January through June. So far this year,
retail pork prices have moved in a more seasonally normal fashion.
Compared to June 2015, pork was up $0.07 per pound (up 2%) to $3.77
per pound in grocery stores this year. Bacon and ham were the
only cuts with average monthly retail prices above year ago, but
other pork cuts were only down 1%-3% year-over-year.
Retail broiler composite
prices were $0.07 per pound below their year ago level (down 4%)
at $1.92 per pound. Retail whole fresh chicken prices saw a
steep drop in June compared to May, down $0.10 per pound, and ended
up at $1.41 per pound, almost $0.11 below year ago levels.
Average retail turkey prices tracked right on year ago levels since
February, but June’s price fell slightly below that of 2015’s, down
2% year-over-year to $1.51 per pound.
All major proteins,
except pork, averaged below their respective 2015 values in June.
Pork, although above year ago, has not experienced a significant
increase in retail prices but instead was comparing to a seasonally
abnormal price movement in 2015. These generally lower protein
prices, including lower dairy and egg prices, continue to show up
in the Consumer Price Index data.
The CPI, released
this past Friday by the Bureau of Labor Statistics, is a collection of
items from multiple sectors of the economy to form a singular basket
of goods so prices can be compared over time and the effect on U.S.
consumers can be monitored. The CPI for June reflected generally
lower meat prices compared to year ago levels. This has been
a consistent trend since the start of the year. Energy CPI
continued to increase, up 11% since January, largely on higher fuel
costs. The “all items less food and energy” category continues to
track about 2% above year ago, with the main contributors to the
year-over-year increase being housing and medical costs.
Daily Livestock Report
18th: Consolidation or Integration in the Beef Industry
The beef industry
finds its origins in the gritty independence and individual perseverance
of the people who moved out west to the plains and learned to survive harsh
winter weather, drought, volatile markets and emerge to grow the business
to produce a world class product. That independence of spirit sometimes
clashed with the corporate meat processors in Chicago dominated by Swift,
Cudahy, Armour and Wilson. The large beef processing corporations never
ventured into the world of the cattle raisers and the two segments remained
separate and in constant war with each other over price at the point of
transfer of ownership.
That all changed
when Currier Holman created IBP and moved the beef plants closer to the
feedlots supplying the cattle. This allowed the other beef companies that
followed to develop a closer relationship to the producer. The landscape
changed from all arms length transactions between feeder and processor
to the introduction of committed supplies sold under formulas based on
the cash trade and carcass performance. Some of the processing companies
ventured into cattle feeding and operated their own feedyards. Feedlots
with their own cattle close to the plant provided starters for each day's
slaughter and fill in needs to provide a little extra leverage in the cash
Meanwhile the other
meat processors moved towards a fully vertical integration model covering
the entire live life cycle of the animals processed. The processors owned
the animals and sometimes the facilities to grow them prior to harvest.
Today poultry and pork are dominated by the large corporate companies who
control the process from birth to the sale out the back door of the processing
The recent sale of
feedlots by Cargill can be viewed in several ways. It may be the start
of a movement by the processors to turn the live animal sector back over
to the feeding companies. Cargill's press announcement seems to imply Cargill
felt it could better use the investment to advance the meat business than
the feeding of live cattle. Alternatively, it might represent a closer
and more integrated relationship between the feeding companies and the
processors. Under these type arrangements, the feeding companies might
share in the processing margins as part of the consideration in payment
for cattle at point of transfer to the plant.
It is safe to assume
the beef processors will not plan to move into cattle breeding. Over half
of the nation's calf crops are raised by small herd of less than 50 cows.
It is also not likely the processors will engage in ranching and growing
the cattle on pasture but a larger more integrated arrangement between
the feeding companies and the processors is possible and probably exists
in some forms today.
Ag Center Cattle
12th: Projected Cow-Calf Returns to Decline
Since the mid 1970’s,
the Livestock Marketing Information Center (LMIC) has estimated annual
cow-calf returns based on a typical commercial full-time operation.
Those estimates are for market analysis purposes and are not intended to
represent an individual operation or resource base. They are useful
only in a broad context and of course LMIC makes those estimates because
producer return is a key factor influencing national herd growth or contraction.
LMIC returns only include cash costs of production and pasture rent. That
is, return to owner management, labor, etc., are not included.
Over the last few
months, cattle prices have been lower than expected; LMIC’s price forecasts
for calves to be sold this fall have been reduced and are currently about
15% below 2015’s. Year-over-year, the percentage decline in cull
animal prices is even larger (dropping 25% to 30% from 2015’s). Those
lower prices to be received by cow-calf producers have caused 2016’s expected
return over cash costs plus pasture rent to be revised lower, significantly.
Costs of production are projected to decline slightly compared to 2015’s
due to lower feedstuff and fuel costs. On a per cow basis the year-on-year
drop in those items will be only about 3% or roughly $25.00 on a per cow
LMIC estimated return
peaked in calendar year 2014, surging to just over $530.00 per cow.
In 2015, the return was just over $300.00. That was the second highest
ever calculated by the LMIC, unadjusted for inflation. With the recent
adjustment down in LMIC’s forecast cattle prices, the 2016 return was lowered
to $133.00 per cow. If realized that will be the lowest since 2013.
While that is still a positive return over cash costs of production (including
pasture rent), for some relatively high-cost operations that return may
not cover all economic costs. A further decline is forecast for 2017.
The rapid drop in cow-calf returns in 2016 and 2017 is likely cause for
producers to ratchet-back beef cowherd expansion plans compared to those
of recent years.
Cattle & Calves Inventory: January 1, 2016 vs. 2015
Compiled from USDA
National Agricultural Statistical Service Data
Cows Inventory: January 1, 2016 vs. 2015
Compiled from USDA
National Agricultural Statistical Service Data
Heifers Inventory: January 1, 2016 vs. 2015
Compiled from USDA
National Agricultural Statistical Service Data
29th: January 1 Cattle Inventory Up 3 Percent
USDA - National
Agricultural Statistics Service (NASS)
All cattle and
calves in the United States as of January 1, 2016 totaled 92.0 million
head. This is 3 percent above the 89.1 million head on January 1, 2015.
Calf Crop Up 2 Percent
All cows and heifers
that have calved, at 39.6 million head, are 3 percent above the 38.6 million
head on January 1, 2015.
Beef cows, at 30.3 million
head, are up 4 percent from a year ago. Milk cows, at 9.32 million head,
are up slightly from the previous year.
All heifers 500 pounds
and over as of January 1, 2016 totaled 19.8 million head. This is 3 percent
above the 19.3 million head on January 1, 2015.
Beef replacement heifers,
at 6.29 million head, are up 3 percent from a year ago.
Milk replacement heifers,
at 4.82 million head, are up 2 percent from the previous year.
Other heifers, at 8.71
million head, are 3 percent above a year earlier.
All Calves under 500
pounds in the United States as of January 1, 2016 totaled 14.1 million
head. This is 4 percent above the 13.5 million head on January 1, 2015.
Steers weighing 500
pounds and over totaled 16.3 million head, up 4 percent from one year ago.
Bulls weighing 500 pounds
and over totaled 2.14 million head, up 2 percent from the previous year.
The 2015 calf crop in
the United States was estimated at 34.3 million head, up 2 percent from
last year's calf crop.
Calves born during the
first half of 2015 were estimated at 24.8 million head. This is up 2% from
the first half of 2014.
The calves born during
the second half of 2015 were estimated at 9.50 million head, 28% of the
total 2015 calf crop.