The Cattle Range Home Page
November 6, 2017
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Herd Growth Slows

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Herd Growth Slows
Ag Center Cattle Report

The signs were everywhere of a slowing in the growth of the national beef cattle herd. Cow slaughter is up – running 15-20% above last year. Those cows held back for one more calf, during the period of record high calf prices, are now being culled from the herd. Rational exuberance is gone and breeders are back making economic decisions regarding herd sizes based on current conditions and inputs.
 
The breeder is at the start of the beef production cycle and ultimately either suffers the pressures of overproduction of benefits of underproduction. The other participants in the beef chain are all middle operators, buying and selling on margins that sometimes exists and sometimes are lacking. When prices fall, everything is pushed back to the breeder.
 
While calf prices are well under the highs of three years ago, they are seeking a sustainable level for stable production and herd size. Confirming the slowing in herd grow is the number of heifers being placed on feed in the nation’s feedlots. Double digit increases over prior year have been posted for the past year and now heifers as a percentage of total slaughter numbers is showing large increases. This is positive for fed cattle prices and average carcass weights because heifers are marketed at lower out weights. Steers remain almost 2/3 of the daily fed slaughter.
 
A weighted average annual fed cattle price in the $120s would have a stabilizing influence on the size of the national cow herd. This would allow yearlings to sell in the $150s and calves in the $170s giving each sector of the beef production cycle reasonable pricing. Genetics will always push weaning weights higher helping breeders, but breeders also must fight higher inputs costs on other fronts such as medicine costs, interest rates and feed costs not including rising cost of cattle care.
 
Weather and feed cost always play the role of outside uncontrollable influences on both price and production levels. Corn at $3.50/bushel will eventually discourage corn production and prices will rise. Regional drought pockets like the Dakotas, Wyoming and Montana will always exist. This simply means herd numbers will forever be dynamic depending on many factors of that often are beyond our control.  

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