Swift Expansion of the Beef Herd Continues

– Dr. Kenny Burdine, Livestock Marketing Specialist, University of Kentucky

As always, USDA’s January 1 cattle inventory estimates provided much data for discussion. Continued good weather and historically strong calf prices for much of the year led to further herd expansion. The headliner was a 3.5% increase in the number of beef cows in the US, which exceeded most expectations. Part of the reason for the increase was a downward revision to the 2015 estimate by a little more than 1%, so the total number of cows is not that different from expectations. But, it does mean that the cow herd is growing at a very rapid pace and that we are likely to see over 3% more calves moving through markets during 2016.

Anytime we are in an expansion phase, heifer retention is also of particular interest. Heifers being held for beef replacements were up a little more than 3%, which suggests expansion should continue in 2016. It is also worth noting that a slightly larger share of those heifers are expected to calve in 2016, as compared to 2015. As we have discussed previously, reduced cow slaughter was the major driver during 2014 and 2015. While cow slaughter was extremely low during the last two years, it is likely to pick up in 2016. Once this happens, heifer development will be driving future changes in beef cow numbers and the pace of expansion will slow.

Turning our attention closer to home, Kentucky beef cow numbers were up 2.4%, but this was also after a downward reduction in the 2015 estimate. This puts Kentucky beef cow numbers at an estimated 1.021 million cows, which is not that different from the original 2015 estimate. Interestingly for KY, our beef heifer retention estimate was up by 20,000 head, which is about +14%. Another way to put the 20,000 heifer increase into perspective is by considering that this would represent 2% of Kentucky’s beef cow herd. The sharp drop in prices from summer to winter may have been part of the reason for this increase. While there is no way to know how much this happened, I do know there were some stocker operators who chose to breed heifers, rather than sell them as feeder this fall.

The USDA report is summarized in the table below and the full report can be accessed at: http://usda.mannlib.cornell.edu/usda/current/Catt/Catt-01-29-2016.pdf


Source: NASS, USDA