Beef Herd Expansion Slower In 2017

There seems little doubt that cattle herd expansion continued this year, albeit at a slower pace than 2016, said Oklahoma State University Agricultural Economist Derrell Peel in the “Cow/Calf Corner.”

The jump in heifer and beef cow slaughter reflects a return to more typical relative slaughter rates, he said.  He estimated the Jan. 1, 2018, beef cow herd would be up 1.5% to 2.0% over January 2017.

Expansion rates above or below that are possible, he said, though expansion above 2.5% is difficult to reconcile with current numbers.  Expansion below 1.5% is possible, but it would suggest an unusually large percentage of pregnant heifers available Jan. 1 did not enter the herd.




The beef cow herd began the current expansion in 2014, growing 0.75%, followed by more significant growth in 2015 of 2.95% and in 2016 of 3.46%.  From the January 2014 low of 29.1 million head, the herd has expanded by 2.1 million to the January 2017 level of 31.2 million.

On Jan. 1, 2017, 6.4 million replacement heifers were reported, representing 20.6% of the beef cow inventory, he said. Of the total, 4.0 million were expected to calve in 2017.  This was a record number of reported heifers calving since this data became available in 2001.




Changes in the beef cow herd are a function of the pace of heifer retention relative to the pace of cull cow slaughter, Peel said.

Heifer slaughter through late November was up 12.3% year over year.  This follows from the jump in quarterly heifers on feed, up 10.6% in July and 13.0% in October.

However, even with the increase in heifer slaughter, the ratio of steer to heifer slaughter remains well above historical levels, he said, and while heifer slaughter is increasing, it has yet to return to normal levels relative to steer slaughter.




Beef cow slaughter was up 10.1% through late November, Peel said.  This follows a 13.7% year-over-year increase in 2016.

Part of the cow slaughter increase is simply a function of herd growth since 2014, he said.  However, like heifer slaughter, beef cow slaughter was sharply reduced in 2014-2016 as a part of jumpstarting herd expansion.

Net beef cow culling was a record low 7.6% in 2015.  Sustained below-average culling rates in 2014-2016 were possible following above-average culling from 2008-2013, including drought-forced liquidation.

If the current beef cow slaughter pace continues through the end of the year, the 2017 rate will be 9.0%, Peel said, only a little below the long-term average of 9.6%.




Only 75 head of fed cattle sold on the Livestock Exchange video auction Wednesday at $116 per cwt.  The USDA reported 543 steers at $117.66 per cwt on a live basis through Thursday.  No other cash action was reported.

Scattered cash cattle trade came last Tuesday at $117.50 to $118.50 per cwt on a live basis, down $1.50 to $3 from the previous week with more Wednesday at $118 and at $188 on a dressed basis, down $1 to $2.  However, more trade came Thursday at $117 live and $187 dressed, down $2 and down $2 to $3, respectively.

The USDA’s choice cutout Thursday was down $1.44 per cwt at $201.04, while select was off $1.33 at $183.69.  The choice/select spread narrowed to $17.35 from $17.46 with 120 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Wednesday was $154.31 per cwt, up $0.67.  This compares with Thursday’s Jan settlement at $146.25 per cwt, up $0.60.