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There Are Always Decisions To Be Made…
DR. TERESA L. STECKLER
SIMPSON, ILL.
There are always decisions to be made and each industry has their own unique issues/challenges. Currently, fall calving herds are in the process or will soon be weaning their calves while spring calving herds are calving or will begin shortly. All businesses should have immediate, short, and long-term goals and livestock farms are no exception.
Immediate goals may include increasing feedstuffs based on the current nutritional needs; e.g. freezing rain, temperatures below freezing, third stage pregnancies, and/or windy conditions. Short-term goals may include diluting fescue in a pasture by frost seeding legumes. Long-term goals may include herd production goals, such as increasing weaning weight, improving milking, etc.
An additional long-term goal includes replacing older cows, cows that died, and/or unproductive females. Questions you should ask yourself include: 1) what is the maximum number of cows the land can accommodate (especially during periods of drought) and/or I can manage with my time and facilities; 2) should I develop home-raised replacements; 3) should I purchase open heifers; 4) should I purchase bred heifers; 5) should I purchase cows (bred or unbred); or 6) should I purchase a new herd bull(s)?
If a goal is to improve your herd genetics then purchasing bull(s), heifers, and/or cows from reputable breeder(s) will move your herd in that direction. Regardless of the above-mentioned questions your goals must consider the cattle markets. One question that always seems to arise is: “where will the markets be in 6 months, a year, two years?” While no one has a crystal ball, there are data available from the USDA to help you make decisions to achieve your beef herd business goals.
Markets throughout the world were extremely volatile in 2020 due to the COVID-19 pandemic and the US beef cattle markets was no exception. The pandemic affected beef exports with a reduction of 5.3 percent year over year through October. There was a sharp drop in beef exports in May and June but rebounded from July to October. In 2020, beef exports to Mexico, one of our largest beef importers, was down 37.9 percent year over year with declines every month. However, one must also consider Mexico is in a recession. Nevertheless, US beef trade is stabilizing as the initial COVID-19 disruptions continue to fade.
Feedlot marketings were also very volatile in 2020 with monthly marketings varying from 13 percent above in March to 27 percent below in May and back to 6 percent higher year-over-year in September. From January through November 2020, total marketings were down 3.1 percent year-over-year.
US herd dynamics and the cattle cycle are, in my opinion, important numbers to consider when deciding to decrease or increase your herd numbers. Herd dynamic numbers include heifer retention, cull cows, and total female slaughter while the cattle cycle is a term that is often used to indicate periods of expansion or contraction of all cattle inventory.
The current cycle began in 2014 with 88.2 million head to 94.8 million head in 2019.The inventory of all cattle and calves in the US was 93.6 million head on January 1, 2021, down fractionally from 93.8 million head in 2020. Total female slaughter (heifers plus cows) was 43.6 percent when herds were expanding in 2016. While, in 2019, female slaughter was at 49.1 percent of total slaughter. On January 1, 2020, the number of beef replacement heifers was 18.4 percent of the beef cow inventory, down from a peak retention rate of 21.0 percent in 2016, when herds were expanding.
So, what does this all mean? Well, I am not an economist, but I think the beef industry will contract slightly in 2021 and maybe in 2022. Recent conversations with cattlemen in Illinois have indicated that many are tired of trying to make a “go of it”. Why are they tired? Several reason(s) have been given - severe weather and/or mud, lack of pasture, market volatility, producer age, etc. Each beef producer has his/her reason(s) for leaving the business, but who will replace those leaving? Those that I know entered the cattle business when prices were high exited within 5 years due to lack of profits and weather challenges. However, those that have left the cattle business in the last 6 months has been for various reasons.
Regardless of whether you decide to decrease, maintain or increase you herd numbers and wherever you procure your female replacements, pick females with the best genetics that will move your herd forward. But do not select females solely on genetic merit – look at overall conformation and feet structure. If the dam is around look at her structure and udder. Ultimately you want structurally sound replacements that can remain in the herd for several years. Good luck!! ∆
DR. TERESA L. STECKLER: Extension Specialist, Animal Systems/Beef, Dixon Springs Agricultural Center, University of Illinois
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