It looks like 2005 might see a modest expansion in the U.S. cattle industry.
"U.S. cow/calf producers have been operating in the black since 1999," says James Mintert, Kansas State University Research and Extension agricultural economist. "Despite that, cow/calf producers have not held back females from slaughter to expand their herd size, as often happens in profitable years."
One big factor that held expansion plans in check was poor pasture and range conditions. But, another year of positive returns and improved forage supplies could finally bring herd liquidation to a halt, he says.
Mintert explains that historically, when female slaughter has equaled or exceeded 100 percent of steer slaughter, it has meant that U.S. producers were trimming their cow herds. Conversely, when female slaughter, was in the low 90 percent of steer slaughter levels, it typically indicated that producers were expanding herds.
Cow/calf producers began cutting the U.S. cow herd size in 1996. "The U.S. cow herd shrank 2.2 percent and 1.6 percent, respectively during 1996 and 1997," he notes. U.S. producers continued to trim herd size modestly from 1998 through 2003, with annual cow herd inventory declining each year by 0.25 percent to 0.82 percent.
"The slaughter pattern during 2004 indicates that we are shifting away from herd liquidation toward modest expansion," Mintert says. "Through mid-November, female slaughter during 2004 totaled about 94.3 percent of steer slaughter. As a result, it looks like the upcoming USDA Jan. 1, 2005, estimate of the U.S. cow herd could be larger than the prior year for the first time since January 1996."
Kansas State University