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Animal Science: Today and Tomorrow

February 19, 2014

Dr. Tom Troxel                                                                                Dr. Michael L. Looper

USDA Forecasts of Beef Supplies

Beef: US beef supplies for next year are still expected to decline sharply and the most recent update forecasts total US beef production in 2014 to decline some 1.472 billion pounds (-5.7%) compared to 2013 levels. The decline in total output reflects expectations for a sharp reduction in the number of cattle coming to market. Supplies of cattle on feed remain limited and the expectation is for placements to remain constrained for much of 2014. Demand for replacement heifers remains strong and this should limit the number of female calves going into feedlots.

USDA indicated that they raised domestic production mostly because they now think steer carcass weights in 2014 may be a bit higher than earlier thought. There was some expectation earlier in the fall that the removal of Zilmax could cause steer weights to drift below year ago levels but that has not yet happened. However, it is not entirely clear that the industry will continue to advance weights higher in 2014. After all, there is a push to develop programs that are ractopamine free and thus would open opportunities in markets that so far ban US beef on that basis. Also, it is possible that part of the reason weights continued to perform well this fall is because feedlots placed more yearling on feed during the summer months than a year ago. It remains to be seen how steer weights will fare once placements return to a more normal placement pattern (Source CME Group).

Arkansas bucks national decline in cattle numbers

Arkansas’ cattle numbers are recovering nearly two years after the start of a drought that caused $128 million damage to the state’s beef industry, while national numbers plummet to their lowest levels in more than 60 years. The number of cattle nationwide declined to 87.7 million head in January, the smallest since 1951, but Arkansas is continuing to buck the trend, with the January count up 4 percent from the year-earlier count to 1.66 million head, according to the National Agricultural Statistics Service.

Due to the 2012 drought, the 2013 Arkansas cattle inventory declined 4 percent and the national cattle inventory declined 2 percent. However, with rains returning in 2013, the Arkansas cattle inventory recovered to about the cattle inventory level of Jan. 1, 2012. As of Feb. 11, Arkansas was 99.66 percent drought-free. A year ago, nearly half the state suffered from drought. In 2012, the state was drought-free according to the U.S. Drought Monitor report issued April 24. By May 29, all of the state had some drought classification.

Arkansas beef cow numbers increased from 851,000 head in 2013 to 882,000 in 2014. Other states with a 4 percent or greater increase in beef cow number included Kansas, Mississippi, New York and Pennsylvania. With drought deepening in California and still affecting other western states, the U.S. cattle inventory will continue to face difficulty recovering.

Beef expanding?

Nationwide, beef producers are starting to show some signs of expansion. The number of beef replacement heifers was up 2 percent or 5.5 million head. Arkansas beef cattle producers are also optimistic about the future — they increased the number of replacement beef heifers by 6.2 percent.  It takes time to rebuild the cow numbers but it starts with retaining heifers and it appears the cattle producers are beginning the process with the 2013 heifer crop. Beef cow replacements numbers have declined for many years. With an increase in beef replacement in 2013, there is an outside chance we could see an increase in beef cow numbers in 2015 or 2016, but much will depend on what happens with corn and feed prices, and rainfall.

Arkansas beef cattle producers maybe a step ahead of the nation. With the smaller national herd, decrease in supply with an increase in demand for beef both domestically and foreign, beef prices are expected to be higher in 2014 than in 2013. Cost of feed is expected to be lower than in recent years. If Arkansas cattle producers can manage their cost, profits can potentially be higher than in recent history.

Calf numbers

In Arkansas, the calf crop for the full year of 2013 was 760,000, unchanged from 2012. The 2013 calf crop for the U.S. was 33.9 million head – the smallest since 1949. All cows and heifers that have calved, at 890,000 head, were up 3 percent January 2014, and beef cows were at 882,000 head, up 4 percent. All heifers weighing 500-pounds and more were up 6.2 percent to 137,000 head. Steers were up 4 percent at 135,000 head and calves weighing less than 500 pounds were down 2.7 percent to 360,000 head.

Rain returns

During 2013, Arkansas experienced normal rainfall, producing adequate amounts of forage. This, along with strong selling prices in 2013, may have caused Arkansas beef producers to sell light weight calves — those less than 500 pounds — rather than graze excess forage to improve weights and hopefully profits, especially calves weaned in the fall.

The 2014 cattle and calf inventory is nowhere near the record numbers set in 1975. In 1975 there were 2.68 million all cattle and calves, 1.35 million cows and heifers that calve and 1.26 million beef cows.

For more information about cattle production, visit www.uaex.edu or www.arkansas-livestock.com or contact your county extension office. Please note that any bookmarked pages or publications at www.uaex.edu will be changing in the next few months.

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