Cattle Production Most Important To US Agriculture

Cattle production is the most important US agricultural industry, consistently accounting for the largest share of total cash receipts for agricultural commodities, said Mark Johnson, Oklahoma State University Extension beef cattle breeding specialist, in a letter called Cow-Calf Corner.

In 2024, for instance, US cattle production represented about 22% of the $515 billion in total cash receipts for agricultural commodities, Johnson said.

With rich agricultural land resources, the US has developed a beef industry that largely is separate from its dairy sector, making it unique when compared with other countries, he said.

In addition to having the world’s largest cattle finishing industry, the US is the world’s largest total consumer of beef – primarily high eating-quality, grain-fed beef, Johnson said.

 

A SEGMENTED INDUSTRY

 

The cow-calf sector serves as the source of calves that will become beef, he said.  This sector maintains a herd of beef cows for raising calves.

US, cow/calf operations are located on land that typically is not suited or needed for crop production, he said.  These operations depend on range and pasture forage conditions, which vary a great deal based on the area’s rainfall and temperature.

Based on the USDA, NASS 2022 Census of Agriculture data, the average beef cow herd size was 47 head, he said.  Operations with 100 or more beef cows compose 10.5% of all beef operations and 60.5% of the beef cow inventory, Johnson said.

 

HISORICALLY LOW INVENTORY

 

The current US beef cow inventory is historically low, he said.  This, coupled with robust consumer demand for high-quality beef, results in high values for beef and beef cattle.

With that backdrop, consumer beef demand currently is being supplied through finishing cattle to historically heavier carcass weights, Johnson said.

The biological time lag of beef production is long.  If a high percentage of heifer calves were selected now to be retained for breeding, they would be ready next spring at 14 to 15 months of age.

The following spring, those heifers would calve at two years of age (Spring, 2027), and their calves would be ready to sell at weaning in the fall.  These calves would become yearlings in 2028 and be marketed as finished ‘A Maturity’ finished cattle for slaughter six to eight months after entering the feedyard.

“Bottomline: when we begin to retain heifers (on a large scale), we are a couple of years away from increasing the cow inventory, and at least 30 months away from increasing the supply of weaned calves, and so on, regarding yearlings and fed cattle,” he said.

 

CATTLE, BEEF RECAP

 

The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $235.86 per cwt to $235.86, compared with last week’s range of $225.15 to $243.37 per cwt.  FOB dressed steers, and heifers went for $372.50 per cwt to $373.15, compared with $353.24 to $379.61.

The USDA choice cutout Monday was down $0.28 per cwt at $390.22 while select was up $6.15 at $383.10.  The choice/select spread narrowed to $7.12 from $13.55 with 64 loads of fabricated product and 23 loads of trimmings and grinds sold into the spot market.

The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $397.92 per cwt, and 50% beef was $220.80.

The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.35 a bushel over the Jul corn contract, which settled at $4.19 1/4, down $0.09 1/2.

No live cattle delivery notices were posted.

The CME Feeder Cattle Index for the seven days ended Friday was $310.85 per cwt, down $0.14.  This compares with Monday’s Aug contract settlement of $302.80, up $0.35.