26 July 2012

3 minute read

North America

The Cattle report, which gives a timely count on a range of categories from breeding cows to the size of this year’s calf crop, had been eliminated by USDA-NASS, but it was subsequently reinstated for this year. However, the future of that long-standing report remains uncertain.

Overall, the Cattle report showed more drought-induced whittling away of US cattle numbers had occurred prior to the July 1 than expected. At 97.8 million head, the total of all cattle and calves was down 2.2 per cent from a year ago. Nationally, both the beef and dairy cowherds were a little smaller than anticipated with year-on-year declines in beef cows at 900,000 head and the dairy herd unchanged. Importantly, producers had reported an annual increase in the number of heifers held for beef cow replacements as of January 1, but by July 1 there was no change compared to a year ago indicating drought had already adjusted producer plans. USDA’s first indication for the 2012 calf crop was 2.3 per cent or over 800,000 head below 2011’s.

Market analysts had a very wide range in expectations prior to USDA’s monthly Cattle on Feed report. USDA helped settle the debate on how drought had impacted those numbers. The on-feed count in feedlots with 1000 or larger capacity was 2.7 per cent above a year ago with placements of cattle into feedlots and marketings both below 2011’s. The nearly nationwide drought this year was impacting feedyard placements differently than last year’s drought which was more regionally intense in the southern states. During June, placements this year were 24 per cent above a year ago in Nebraska, even with last year in Kansas, and dropped 16 per cent in Texas.

In terms of cattle feeding, USDA confirmed the view that high grain prices were changing the nature of the US industry by reducing participation of the smaller (less than 1,000 head) farmer feedlots. That is, the number of cattle being fed by traditional diversified crop/livestock farms has been reduced due to high feedstuff prices. The result is, even though the monthly 1,000 head and larger on-feed count was up 2.7 per cent, the national uptick was less than one per cent.

An often calculated statistic, which uses data from both the cattle mid-year reports, is the supply of potential feeder steers and heifers outside feedlots. That statistic has been declining since July 1, 2008 but the rate of change has accelerated the last two years. As of July 1, 2012 the one year decline in the supply of steers and heifers was 3.2 per cent (down 1,184,000 head). Last year the mid-year drop was 2.5 per cent (961,000 head).

Further Reading You can view the full report by clicking here.