Malatya Haber Interpreting USDA's latest cattle report
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Interpreting USDA's latest cattle report

While the overall animal inventory was unaltered in the U.S. Department of Agriculture's latest cattle report, revisions to the 2012 numbers in several categories have affected interpretations of the report.

The inventory of all cattle and calves was 89.3 million head, a decrease of 1.6 percent from the unrevised 2012 value. The estimated inventory of beef cows on Jan. 1, 2013, was 29.3 million head, down 2.9 percent from year-ago levels.

Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist, said the estimate for Jan. 1, 2012, was increased by 275,000 head, which means the decrease from 2011 to 2012 was not as severe as earlier indicated.

"Though the drop in beef cow numbers in 2012 was larger in percentage terms than pre-report estimates, the overall level of inventory is pretty close to what was expected," he said. "In other words, we had a bigger drop from a bigger total and ended up about where we thought we would be."

Nearly all of the revision in beef cow numbers was in Oklahoma and Texas, suggesting that cow liquidation in 2011 was not as severe as earlier estimated in the two states. By contrast, Texas lost even more beef cows in 2012--a decrease of 12 percent--while Oklahoma beef cow numbers dropped a modest 1.3 percent in 2012.

Also revised in the recent report was the estimate for beef replacement heifers. For Jan. 1, 2012, an additional 50,000 head of beef replacement heifers was added to the estimates for Nebraska and Oklahoma, resulting in a 2.4 percent increase in the inventory of beef replacement heifers at the beginning of 2012. This sets the estimated inventory of beef replacement heifers for Jan. 1, 2013 as a year-over-year 1.9 percent increase.

"Revised data for the replacement heifers indicate, more than anything else, the contrast between what the industry would like to do compared to what they are able to do," Peel said. "Though the 2012 inventory of beef replacement heifers was up, the drought and continued beef cow liquidation meant that a very low percentage of those potential replacement heifers actually entered the herd."

According to the recent USDA report, the 2013 beef replacement heifer inventory is 18.3 percent of the beef cow herd inventory, the highest replacement percentage since 1995.

"Drought conditions will play a major role relative to how those heifers affect various segments of the cattle industry and market," Peel said.

In any event, even with a larger pool of potential replacement heifers, the potential for herd expansion in 2013 remains limited.

Peel said it would require another significant drop in beef cow slaughter combined with a high percentage of this heifer pool actually being placed into the herd to achieve more than stabilization of beef cow herd numbers.

"Limited beef cow herd expansion is possible in 2013, but it will require almost perfect conditions with respect to cow culling and heifer placement," he said. "Ongoing drought conditions in key parts of the United States do not make that likely."

Downward revisions in the 2012 estimates in other heifers and steers mean that the 2013 estimated feeder supply was actually up slightly, but from an even bigger decrease in the estimated 2012 feeder supply.

The revised numbers indicate the combined inventory of calves, steers and other heifers decreased 1.5 percent, with the decreased feedlot inventory resulting in a slight increase in the residual feeder supply.

Peel expects the squeeze on feeder supplies to continue, given the smaller forecasted 2013 calf crop and reduced cattle imports.

"Without continued reductions in feedlot inventories, the feeder supply will continue to shrink, and if conditions permit, increased heifer retention will further squeeze feeder supplies in the coming years," he said.

Cattle and calves represent the number one agricultural commodity produced in Oklahoma, accounting for 46 percent of total agricultural cash receipts and adding approximately $2 billion to the state economy, according to National Agricultural Statistics Service data. NASS data indicates Oklahoma is the nation's fifth-largest producer of cattle and calves, with the third-largest number of cattle operations in a state.

Date: 3/11/2013


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