It seems everyone in the US cattle and beef industries is trying to be the first to point to data that shows cow/calf producers are trying to rebuild their herds.
With that said, Derrell Peel, Oklahoma State University livestock marketing specialist came up with a novel way of looking at cow culling versus heifer retention. He calculated cow culling and heifer retention as a percentage of the beef cow inventory and said in a newsletter that beef herd expansion occurs when heifer retention (as a percentage of the whole herd) is higher than cow culling (as a percentage of the whole herd).
Currently, cow culling (as a percentage of the herd) is dropping but remains higher than heifer retention (as a percentage of the herd), so herd rebuilding has not yet begun.
COW CULLING PRE-EMINENT
A drop in cow culling will be the first sign of cow/calf producers’ intentions to rebuild their herds, said a feedlot manager. It is cheaper for a producer to keep a proven cow than to retain a heifer that could command a high price in the feeder cattle market and spend the time and money to make her a cow.
Peel said, “Cow culling will determine herd dynamics in 2025.” It will depend on what producers are trying to do and what nature will let them do – drought is still a large threat.”
In the final analysis, the beef cow herd could stabilize, decrease some more or increase fractionally in 2025, Peel said. Heifer retention this year could set the stage for some herd growth beginning next year.
“The inventory of replacement heifers suggests that there are few plans for increased heifer breeding going into 2025,” Peel said, “but impulse heifer breeding during the year may result in additional bred heifers for 2026.”
2024 COW CULLING DOWN SHARPLY
In 2024, cow culling decreased sharply to 10.19% (of the beef herd), about equal to the long-term average, Peel said. In will need to drop further to 9.0% or below for two or more years to indicate herd expansion.
Furthermore, heifer retention has declined continuously since 2021 and has not yet begun to increase, as is required for herd expansion, Peel said.
And, prospects for herd growth this year are very limited, Peel said. The number of bred heifers this year was 2.92 million head, down 1.7% and the smallest since 2001.
So, cow slaughter must decrease at least 7% from 2024 just to hold the beef cow inventory stable for the year, Peel said. This would imply a cow culling rate of 9.3% for 2025. A rate less than this will be required for even fractional herd expansion.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $206.00 per cwt to $209.32, compared with last week’s range of $204.48 to $210.94 per cwt. FOB dressed steers, and heifers went for $325.01 per cwt to $327.97, compared with $320.86 to $336.40.
The USDA choice cutout Thursday was down $1.86 per cwt at $317.40 while select was up $0.70 at $309.84. The choice/select spread narrowed to $7.56 from $10.12 with 90 loads of fabricated product and 27 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $373.56 per cwt, and 50% beef was $112.46.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.17 to $1.30 a bushel over the Mar corn contract, which settled at $4.93 1/2, up $0.03 1/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $274.42 per cwt, down $1.31. This compares with Thursday’s Mar contract settlement of $267.97, up $3.00.