Cattle inventory slips

(Illinois Farm Bureau file photo)

USDA’s recent estimate of all cattle and calves in the U.S. as of Jan. 1 (93.6 million head) declined slightly compared to 93.8 million head at the start of 2020.

But whether farmers and feedlot operators hold steady, expand or contract their herds this year remains to be seen as the economic picture remains in flux.

“We’ve got a lot of moving parts at this point,” Dale Durchholz, market analyst with Grain Cycles, told FarmWeek.

“When you look at the drought monitor, particularly in the Great Plains and West, there could be a push to move animals off of pastures into feedlots,” he noted. “But counteracting that move into feedlots is high corn prices. We could have a real push/pull when trying to place animals on feed this year.”

All cows and heifers that calved as of Jan. 1 totaled 40.6 million head, down slightly from 40.7 million head at the same time last year. Beef cows totaled 31.2 million head in the latest report, down 1%, while milk cows increased 1% to 9.44 million head.

On the flip side, beef replacement heifers increased slightly as of Jan. 1 to 5.81 million head while milk replacement heifers declined 2% to 4.6 million head. Other heifers increased 1% to 9.58 million head.

Calves under 500 pounds totaled 14.2 million, down 1%.

“The two things that jumped out to me is the 2020 calf crop was about 400,000 head below the prior year. That generally argues as we go into 2021 the overall supply of animals going into feedlots or herds could be a little tighter,” Durchholz said.

“The feeder supply outside feedlots is about the same level as a year ago, down less than 100,000 head,” he noted. “That says the available feeder supply is about the same.”

Overall, cattle and calves on feed for the slaughter market in all feedlots totaled 14.7 million head as of Jan. 1, up slightly from last year. The inventory of steers above 500 pounds (16.6 million head) also increased slightly while bulls above 500 pounds (2.21 million head) slipped 1%.

Futures prices last week hovered around $120 per hundredweight for fed cattle and $140 for feeders.

“I think we’ll stay somewhat stagnant (with herd numbers) unless the weather and pasture conditions improve markedly as we get into spring and summer,” Durchholz said.

“This inventory report doesn’t tend to guide prices as much as the monthly on feed numbers and the demand aspect for beef,” he added. “One thing to keep an eye on is how the picture in the hog industry unfolds.

“As we get into feed prices like we’re seeing today, it could have a more immediate impact on changes to the hog herd than the cattle herd. Also watch weekly and monthly numbers for broilers.”

In Illinois, all cattle and calves totaled 1.05 million head as of Jan. 1, down 4% from a year ago. All cows and heifers that calved in the state (440,000) also declined 4% while the 2020 calf crop (375,000 head) dipped 5%.

This marks the second consecutive yearly decline in overall cattle numbers in the state and the lowest inventory as of Jan. 1 in the past decade.