Improved pasture and range conditions this year, along with improved wheat pasture last year and prospects for similar conditions this year, are offering ranchers and farmers the opportunity to increase their cow herds cautiously.
The notable exception being California, which continues to suffer through its worst drought in decades.
Sources say the nationally improved conditions this year have been a boon to calf and yearling prices. Producers were able to keep calves at home rather than opt for early weaning and sale just to protect what little grass they had.
Nationally, pasture and range conditions this summer have been the best in years, and there are indications cow/calf producers are culling fewer cows. USDA data show a decline in beef cow slaughter this year, although declines in heifer slaughter are more difficult to see on graphs.
The Plains, Midwest, Southeast and Northeast have seen above-normal rain conditions that have rejuvenated topsoil and subsoil moisture levels and refilled many ponds and reservoirs. As a result, pasture ratings improved dramatically.
During June through August this year, weekly data showed that only 4% to 6% of US pasture and range was rated by the USDA’s National Agricultural Statistics Service as very poor. In 2012, 9% to 33% of pastures and ranges were rated very poor, and last year, the ratings ranged from 8% to 13%.
RANCHERS REMAIN CAUTIOUS
Ranchers, however, have not jumped in with both feet to restock their herds. Dipping a toe in the water would be more like it.
Researchers say that post-drought grasses will not recover fully for at least a year after the drought. They may look like they are ready to take on full stocking of cows and their calves, but they aren’t. The rejuvenated grass can take on a few more, but restocking must be done carefully, or tender plants will be damaged permanently.
Many of the pastures also will need to be overseeded to fill in blank spaces with desirable grasses before weeds take over, and the new sprouts are in no shape to handle grazing right away.
The markets also don’t offer the most ideal conditions for restocking, economists say. It’s true that feeder steer and heifer prices are at or near record highs, but that puts ranchers in something of a Catch-22 situation.
The record-high prices provide incentive to boost herd sizes and sell more calves for greater income. But the record-high prices mean a lost opportunity to sell heifers now rather than commit to another 1 ½ to two years of investment before seeing the first calves go to market.
Nationally, signs point to stabilization and possible growth in the US cow herd, but for many the July inventory data were not clear-cut and instead highlighted the dilemma faced by producers.
The January 1 inventory report showed heifer retention was above a year earlier, and the January-June data on heifer slaughter, suggested heifers were being held back for breeding. However, the mid-year inventory report showed heifer inventories were down. It’s possible producers responded to high prices and uncertain weather conditions by selling heifers they once had earmarked for breeding.
AUGUST PLACEMENTS SEEN DOWN
Because of better pastures, however, producers have been able to graze calves longer than they did last year, and August feedlot placements reported in Friday’s USDA monthly Cattle-On-Feed report are expected to be down from August 2013. A Reuters survey puts placements at 1.692 million head, down 4.5% from a year ago.
The Reuters survey also shows expectations for marketings in August at 1.697 million, down 9.3% from 2013, leaving 9.767 million on feed, a decline of 1.1%.