AFBF: Latest Cattle Report Shows Market Support
US - The latest Agriculture Department cattle inventory report should provide support to cattle markets through 2009, according to Jim Sartwelle, livestock economist for the American Farm Bureau Federation.
25 July 2007
2 minute read
“Based on Friday’s cattle inventory report, which detailed overall beef cattle numbers and the figures reported for beef replacement heifers, we should have continued strong beef cattle markets all the way through 2009,” Sartwelle said.
“Recent strength in the milk and dairy products markets have encouraged dairies to hold inventories at current levels, if not expand their milking strings,”
Sartwelle.
The report showed that all cattle and calves totaled 104.8 million head, down 400,000 head from July of last year. Beef cows that have calved also decreased 100,000 head from mid-year 2006, checking in at 33.35 million head. Dairy cows that have calved were unchanged from a year ago, totaling 9.150 million head.
“Recent strength in the milk and dairy products markets have encouraged dairies to hold inventories at current levels, if not expand their milking strings,” Sartwelle explained.
The AFBF economist said that heifers held for beef cow replacement were down 6 percent from July 2006.
“In one year, beef replacement heifers dropped by 300,000 head,” Sartwelle said. “That number alone indicates reduced calf supplies through 2008. The heifer that does not get kept back for breeding purposes in 2007 does not produce a calf in 2008 and does not yield a fed steer or heifer for harvest during 2009.”
Sartwelle said cow-calf operators have seen strong calf prices for the last two years, so there have been plenty of incentive to build cow numbers. He said you don’t have to look any further than the weather map to see the reason the most recent herd expansion has stalled, as continued dry weather in parts of the intermountain West and the Southeast have induced herd reductions. Indications are that trend has slowed in the Southeast with recent rains.
The calf crop for the first six months of 2007 is estimated at 27.15 million head, down 200,000 head from January through June 2006. That figure also supports continued strong cattle and calf markets for the next 24 to 30 months, according to Sartwelle.
“We have questioned what the effect of the 2006 drought in Texas and the Southwest would be, and it is now apparent there was at least a slight dampening effect on rebreeding brought on by drought stress,” Sartwelle said. “The bottom line for this semi-annual inventory report is the current cattle cycle might be one of the shortest ever, continuing to squeeze calf and feeder cattle supplies. This supply squeeze will continue to mitigate much of the volatility of the corn market.”
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