Killing the Cattle Herd

Andrew P. Griffith

KNOXVILLE, TENNESSEE

Beef cow inventory reached a 61 year low based on the January 1, 2023 Cattle Inventory report. The questions that come to mind is how has the industry got to this point, and how is the industry going to rebuild? The answer to the first question is a little easier to answer since hindsight provides the answer. The answer to the second question is a little fuzzy, but history can provide insight to the route of growth.

How did the cattle industry get to a 61 year low for beef cow inventory? The answer is simple. Cattle industry participants have been forced to kill the cattle herd. That is a harsh way to say it so a nicer way is to say the cattle have been harvested. Beef cow inventory has declined for four consecutive years. Over that period, beef cow inventory has declined 2.77 million head. Each of those years, annual federally inspected beef cow slaughter has been greater than 10 percent of January 1 beef cow inventory. From 2019 through 2021, federally inspected beef cow slaughter as a percent of January 1 beef cow inventory ranged from 10.1 percent to 11.5 percent. In 2022, federally inspected beef cow slaughter was 13.2 percent of January 1 beef cow inventory, which means the drought of 2022 forced cows off of pasture and into the slaughter mix at a more rapid pace. This compares to beef cow herd expansion from 2014 through 2018 when beef cow slaughter ranged from 7.6 to 9.6 percent of January 1 beef cow inventory.

The beef cow herd has not only been killed by slaughtering beef cows, but also by reduced heifer retention and increased heifer slaughter. During the period of beef cow inventory growth from 2015 to 2019, the number of heifers held for beef cow replacement ranged from 5.88 million head to 6.36 million head, which represented a 19 to 21 percent retention relative to beef cow inventory. Alternatively, beef heifers held for replacement during the four consecutive years in which beef cow inventory declined ranged from 5.16 to 5.81 million head. This retention values represent a retention rate of 17 to 18 percent relative to beef cow inventory.

Drought is not the only thing that has forced a reduction in the beef cow inventory. Urban sprawl and tearing out fences for crop ground has also taken land resources away from the beef cow herd. The way this typically works is that developers purchase good crop ground for building houses or other development and then crop farmers convert the best hay ground and pastureland to grain, oilseed, and fiber production. This generally comes in the form of pushing out tree lines and fences, which are expensive to replace. Thus, there are fewer resources for cattle production.

Another element to killing the cattle herd is low profitability. The reasons for low profitability include high input prices, low cattle prices, and some self-induced issues relating to efficiency. Despite input prices remaining elevated, many input prices are softer than a year ago. Alternatively, cattle prices are much higher today than they were one year ago. This brings us to the self-induced issues, which include forage management, reproductive management, maintaining adequate nutrition, and failure to market. The self-induced challenges are where people should place more focus.

The take home message is when beef cow slaughter exceeds 10 percent and heifers held for beef cow replacement is less than 19 percent of January 1 beef cow inventory then there is a good chance beef cow inventory is declining. Most of the time, beef cow inventory declines due to exogenous factors such as drought and land having a higher value for some other use. However, there are some circumstances where cattle producers are their own enemy and contribute to a beef cow herd contraction. To say these things are killing the cattle herd may be an overstatement, but it does catch the casual reader’s attention. It is similar to all the discount stores with “Dollar” in their name, because the only thing a person can get for less than a dollar is a warm welcome and ABC gum (already been chewed). ∆

DR. ANDREW GRIFFITH: University of Tennessee