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Cattle Making Their Way Back To Pasture
DR. ANDREW P GRIFFITH
KNOXVILLE, TENN.
The much anticipated January 1, 2016 Cattle Inventory report was released at the end of January. Industry experts were expecting a large increase in all cattle and calves, but the focus was on the beef sector. What industry experts did not expect was that the increase in cattle numbers would be as large as it was. All cattle and calves increased 3.2 percent (2.85 million head) to just shy of 92.0 million head compared to a year ago. Beef cows that calved increased 3.5 percent to 30.3 million head. The increase in the beef cow herd totaled 1.03 million head which accounts for 36.2 percent of the total increase in cattle inventory from January 2015 to January 2016.
Heifers retained for replacement increased 3.3 percent compared to a year ago and totaled nearly 6.29 million head. What may be even more impressive is that the number of heifers retained that are expected to calve in 2016 increased 5.7 percent and totaled 3.92 million head. Thus, 62.4 percent of all the heifers retained as replacements are expected to calve in 2016. Additionally, the 2015 calf crop increased 2.3 percent compared to the 2014 calf crop resulting in 34.3 million calves in 2015. The increase represents an additional 779,700 calves compared to the previous year.
Many states witnessed cattle inventory increases but the biggest increases were in Kansas (350,000 head), Oklahoma (300,000 head), South Dakota (250,000 head) and Nebraska (200,000 head). What may be most interesting is what classification of animals led the increase in these states.
The increase in Kansas cattle inventory was led by animals destined for the feedlot including an increase of 120,000 head in steers 500 pounds and over and an increase of 100,000 head in heifers 500 pound and over that were not considered replacement heifers. Beef cows that calved only represented 17.4 percent of the increase. The increased inventory in Oklahoma was well distributed with 24.3 percent of the increase coming in the beef cow herd, 13.3 percent increase in heifers retained as beef cow replacements and 58.3 percent increase in other heifers and steers 500 pounds and over. In South Dakota, 31.6 percent of the state’s cattle inventory increase was due to increasing the beef cow herd while the majority of the remainder of the increase was in other heifers and steers 500 pounds and over. Nebraska is a little different story as 48.0 percent of the increased inventory was due to growing the beef cow herd while most everything else fell into the other heifers and steers 500 pounds and over.
Someone may be asking by now why such an increase in the categories of other heifers and steers 500 pounds and over. It is important to note that most of the major cattle producing states witnessed increases in this category. There is no one definitive answer, but several factors could be contributing to the increase relative to the previous year. The very first factor is the fact that more calves were born in 2015 than 2014. However, the main reason likely stems from the rapid decline in prices during the fall of 2015 which likely had many producers holding on to calves through the first of the year in hopes of capturing a higher price. Alternatively, most producers were willing sellers in the fall of 2014 because calf prices were so strong. Thirdly, even with prices having declined in late 2015, there is still incentive to add weight to calves before marketing.
So what happened to cattle inventory in Tennessee? All cattle and calves increased 110,000 head (6.4 percent) to 1.83 million head from January 2015 to January 2016. The beef cow herd increased 2.6 percent (23,000 head) to 896,000 head while heifers for beef cow replacement increased 14.3 percent (20,000 head) from a year ago to 160,000 head. Similar to most other states, Tennessee witnessed large increases in other heifers and steers 500 pounds and over. Other heifers 500 pounds and over increased 35.4 percent (23,000 head) while steers 500 pounds and over increased 16.7 percent (20,000 head). The calf crop for 2015 was 860,000 head which was 30,000 head more than 2014.
The cattle herd witnessed rapid expansion in 2015. Expansion in the cattle herd is expected to continue in 2016, but it will be at a much slower rate considering cattle prices have moderated relative to 2014 and the first half of 2015. Beef production in 2016 will increase relative to 2015 which will eventually result in lower retail beef prices. Cattle prices have already eroded more quickly than first expected. Cattle producers can expect prices to stabilize in 2016 with further erosion in 2017. ∆
DR. ANDREW P. GRIFFITH: Assistant Professor, University of Tennessee
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