Beef Cow Herd Expansion Out For 2023: Peel

The numbers suggest cow herd expansion will not be possible this year, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter to Extension agents called Cow-Calf Corner.

Drought-accelerated herd liquidation the past two years has made the beef cow herd the smallest in 61 years, Peel said.

 

HEIFERS DOWN

 

The number of beef replacement heifers on Jan. 1, was 5.16 million head, down 5.8% year over year, he said.  This follows a 5.5% annual decrease in 2022, and beef replacement heifers represented 17.9% of the beef cow herd on Jan. 1, the lowest proportion since 2012.

On average, beef replacement heifers represent 18.4% of the cow herd, and during the last expansion, replacements reached a cyclical peak level of 21.0%, he said.

Beef replacement heifers that will calve in the current year, typically about 61% of the total, was 3.17 million head this year, 61.4% of the total, down 5.1% and was the lowest Jan. 1 beef bred heifer total since 2011, Peel said.  This follows a 4.8% annual decrease in 2021.

Subtracting the number of bred heifers from the total beef replacement heifer inventory leaves the number of heifer calves in development to be bred this year at 1.995 million head, the lowest in the data series, he said.  This total was down 6.9% year over year and follows a 6.1% decline in 2022.

 

NOT ENOUGH HEIFERS

 

The number of beef replacement heifer calves each year is not enough to account for the total inventory of bred heifers the following year, he said.  Over the past 20 years, beef replacement heifers represent 63.8% of the bred heifers the following year, meaning extra heifers were bred that were not reported as replacement heifers on Jan. 1 and are assumed to come out of the inventory of other heifers.

On Jan. 1, the inventory of bred beef heifers was 3.17 million head, made up of 2.14 million replacement heifers from last year and another 1.03 million extra heifers bred out of the inventory of other heifers from last year, Peel said.  This calculated total of 1.03 million extra heifers bred is the lowest back to 2001.

The calculated number of extra heifers bred decreased 12.1% year over year in 2021 and decreased another 1.8% in 2022, he added.

The decreased number of beef replacement heifer calves and extra beef heifers bred in 2021 and 2022 helps explain increased heifer slaughter the past two years, Peel said.  Heifers diverted from breeding to feeding contributed to the 4.0% increase in 2021 and the 4.8% increase in 2022 in heifer slaughter.  All of which contributes to the limited number of replacement heifers available in 2023.

 

CATTLE, BEEF RECAP

 

The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $159.00 to $165.08 per cwt, compared with last week’s range of $160.59 to $162.08.  FOB dressed steers, and heifers went for $254.08 to $261.56 per cwt, versus $251.10 to $258.71.

The USDA choice cutout Thursday was up $0.67 per cwt at $288.50 while select was up $1.15 at $277.58.  The choice/select spread narrowed to $10.92 from $11.40 with 86 loads of fabricated product and 14 loads of trimmings and grinds sold into the spot market.

The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.50 to $1.60 a bushel over the Mar corn contract, which settled at $6.37 3/4, down $0.02 3/4.  Bids in Kansas were steady at $0.75 over May, which settled at $6.33 3/4 a bushel, down $0.02.

The CME Feeder Cattle Index for the seven days ended Wednesday was $184.02 per cwt, up $0.98.  This compares with Thursday’s Mar contract settlement of $188.57 per cwt, up $0.27.