Cattle Herd Rebuild Continues To Slow

The US cattle herd rebuild continues to slow.  It may even be drawing to a close, or at least taking a breather, as cow slaughter drops and heifer slaughter jumps.

The Livestock Marketing Information Center has projected US herd growth to continue through next year at least with Jan. 1, 2019 estimated totals, ranging from 41.168 million to 42.403 million head.

And if the herd is through growing, it will be one of the shortest, fastest upticks in the cattle cycle in history.  This fact alone, makes many believe the effort to rebuild the US cattle herd is not done but is only pausing.




When the current build in the US cattle herd began in 2014, the Jan. 1 herd was the lowest in 63 years at 88.526 million head.  By Jan. 1 this year, the herd was listed at 93.549 million head, a jump of 5.023 million, or 5.67%, in three years.

And even near the close of last year, many in the industry saw the rate of herd growth declining.

As the US herd began to liquidate in the last downturn of the total cattle inventory, heifer slaughter increased while cow slaughter declined.  Producers sold heifers either because prices for feeder cattle were too low to invest in keeping heifers for breeding or because drought conditions made it impossible to feed them.  In many cases, it was both.

That became a vicious circle, however, as short supplies boosted feeder cattle prices to the point where it was too expensive to invest in cows unless the old biddies couldn’t produce any more.  Producers couldn’t pass up the opportunity to sell heifers at very high prices while it cost so much to turn them into cows.

However, by 2014, prices for feeder cattle became so high, and the drought had abated, allowing producers to keep heifers for breeding, and the herd began to grow as heifer slaughter declined, followed several months later by an increase in cow slaughter that did not match the rate of decline in heifer slaughter.




Weekly slaughter data from the USDA’s Agricultural Marketing Service and the National Agricultural Statistics Service shows heifer slaughter during the second week of March at 174,203 head, up 11,582, or 7.12%, from 162,621 the previous week.

At the same time, weekly cow slaughter fell 9,688 head, or 8.47%, to 104,640 from 114,328 the previous week.

The argument could be made that this is only a one-week turn of events, but the contra-seasonal nature of both changes merits a second look.




No cattle traded on the weekly fed cattle exchange auction Wednesday.  Last week, average auction prices were $2.34 per cwt lower at $130.97, versus $133.31 a week earlier.

Little cash cattle trade was reported yet this week.  Prices were reported at $120 to $122 per cwt on a live basis in Nebraska and Iowa.

Bids elsewhere were reported around $124 with asking prices reported at $130 per cwt on a live basis and $208 on a dressed basis.

Last week, cash trade ranged from $126 to $128 per cwt on a live basis and from $208 to $210 dressed.

The USDA’s choice cutout Thursday was down $1.81 per cwt at $207.90, while select was off $0.23 at $200.28.  The choice/select spread narrowed to $7.62 from $9.20 with 99 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $133.21 per cwt, up $0.08.  This compares with the Apr settlement Thursday of $131.95, up $1.42.