Animal Science: Today and Tomorrow
Dr. Tom Troxel Dr. Michael L. Looper
Animal Science Welcomes an Extension Veterinarian
We are very proud to announce a new faculty member; Dr. Heidi Ward. Dr. Ward, Assistant Professor and Extension Veterinarian, is responsible for herd health educational programs and the 4-H veterinarian science project for the Division of Agriculture, Cooperative Extension Service, and Department of Animal Science. She will be working in the area of beef and dairy cattle, sheep and goats as well as equine. Dr. Ward is an Oklahoma native with a Ph.D. from the University of Oklahoma and a DVM from Oklahoma State University.
For the past six years, Dr. Ward worked as a clinical veterinarian in Montana and Arkansas while participating in infectious disease surveillance work. She has a particular interest in herd medicine and bio-security because it combines both science and medicine for the benefit of the producer and consumer.
US Beef Cow Expansion
The US beef cow herd is expected to show strong growth in 2015 thanks to strong calf prices and, even more importantly, excellent pasture conditions and declining feed costs. While at the start of the year the assumption was producers would seek to rebuild their herds given the strong incentives in the market, much of that was dependent on the ability to keep retained heifers in the herd.
Too often in the past producers would retain heifers only to sell them off later due to the lack of available feed. But this year so far has been a continuation of what we saw last year – ample grass supplies and a strong push to retain females rather than send them to the feedlot. The latest USDA crop progress report showed that for week ending July 12, 65% of pastures were in good/excellent condition. This is a 10 point improvement from the previous year and an almost 20 point improvement from the 10 year average.
In 2012, when drought in the Southern Plains forced producers to liquidate a lot of productive cows, the national pasture good/excellent rating was a mere 19%, 46 points lower than today. Conditions in Texas and Oklahoma, which in recent years have been greatly affected by drought, show a dramatic improvement. In the latest report, 77% of pastures and ranges in Texas and 67% in Oklahoma were rated in good/excellent condition.
With plentiful grass, and some of the best calf prices on record, there is little surprise that cow-calf operators are holding on to every cow and heifer they can. Female slaughter (cows/heifers) in May and June was just 40% of the total, well below the levels we saw during the herd rebuilding years in 2005 and 2006.
Consider these numbers: Total cattle slaughter for the period May 3 – June 27 was 4.432 million head, down 358,290 head (-7.5%) compared to the previous year and down 705,782 head (13.7%) compared to the same period in 2013. Female slaughter (cow/calf) during May and June in 2015 was 1.823 million head, down 258,198 head (-12.4%) from a year ago and down 520,743 head (-22.2%) compared to 2013. So the decline in female slaughter has accounted for a little over 2/3 of the overall reduction in US cattle slaughter in May and June of this year. This is normally expected during herd rebuilding years—if anything, the reduction this year has been even more dramatic and consistent with the excellent returns cow-calf operators are enjoying at this time.
Implications: Feedlot placements are expected to be low through the summer, which will continue to limit the supply of cattle coming to market later this year and in early 2016 (Source CME Group).
Hide Values Decline
During the first half of 2015, the value of cattle hides has averaged about $10 per head lower than last year. In June hide values average $86/head compared to $107/head last year, down $21 per head. The fact that cattle slaughter is experiencing one of the largest year-over-year declines and yet hide values have recently plummeted suggests demand for hides has dropped like a rock. And since most U.S. cattle hides and pieces go to international customers, mainly China, does this rapid change in the market suggest major changes occurring with the global economy?
Much discussion has turned towards concerns of a slowdown in economic growth in China as well as focusing on the situation in Greece and how that might impact the U.S. and the rest of the world. Considering that China has experienced double digit growth in GDP for at least 10 years and now there is some analysis suggesting their GNP growth could drop below 5%, this would be a rather large shift in the global economy.
The export value of hides is down 10% so far in 2015 compared to last year, and of the top 10 U.S. export markets for hides, only South Korea (#2 buyer) has increased compared to 2014. Wholesale beef prices in the second half of 2015 are expected to be below a year ago, which coupled with a lower export volume forecast suggests the total value of beef exports will be lower for the year, in addition to the lower hide values (Source CattleFax).
For more information about cattle production, visit www.uaex.edu or contact your county extension office.