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Virginia Cooperative Extension -
 Knowledge for the CommonWealth

The Cattle Business

Livestock Update, March 1997

Bill McKinnon, Animal & Poultry Sciences

The extent of the U.S. beef herd liquidation that took place in 1996 has been documented by the January 1, 1997 U.S. Cattle Inventory Report. In brief, the total cattle herd shrunk by 2% with beef cows shrinking by 3%. Roughly, we sent a million cows to town in 1996 due to poor economic returns to the cow/calf sector and drought conditions in the southwestern region of the country. Nearly one half of the national cow herd reduction occurred in the state of Texas.

The numbers from the inventory report would seem to point to further cow herd reduction in 1997. Beef heifer replacements were also down 2% from one year earlier and down 7% from 1995. The diversion of heifers to the feedlot along with a smaller 1996 calf crop point to reduced feeder cattle supplies for at least the next few years.

January 1, 1997
U.S. Cattle Inventory Report
 1997
(1,000 Head)
1996
(1,000 Head)
'97 as a
% of '96
All cattle & calves101,209103,487 98%
All cows43,56144,644 98%
Beef cows34,28035,228 97%
Beef replacements6,0516,179 98%
 
1996

1995
'906 as a
% of '95
Calf crop 39,586 40,211 98%

January 1, 1997
Virginia Cattle Inventory Report
 1997
(1,000 Head)
1996
(1,000 Head)
'97 as a
% of '96
All cattle & calves 1,830 1,800 102%
All cows 865 860 101%
Beef cows 740 732 101%
Beef replacements 130 125 104%
 
1996

1995
'96 as a
% of '95
Calf crop790790100%

The inventory numbers for Virginia's cattle industry seem to indicate that we were headed in a different direction than the nation as a whole.

The February 1, 1997 Cattle on Feed Report released on Valentine's Day gave evidence to the reason for the recent upturn in feeder cattle prices. The total on feed count was 4% ahead of the same period in 1996. The number of cattle placed on feed in January jumped 21% over the previous January. Though the placement number is being compared to last January when, with higher feed prices feeders were backing off putting cattle on feed; the number is still historically high.

The number of cattle on feed has been growing since last August as heavy feeders deferred from spring placement came in heavy off grass. Those heavy yearlings have been joined by a larger than normal number of heifers diverted away from motherhood. The cattle feeding sector has avoided producing a mountain of beef tonnage by staying extremely current the last few months. Slaughter weights have been routinely running 20 pounds per head lighter than a year ago. The industry will have to stay current from now through the summer to work through the larger than normal number of cattle on feed.

The numbers seem to point to reduced supplies of cattle and beef down the road with improved prices to follow. Some are painting a bright picture even for the cow/calf sector in just a year or two. This optimism is fueled by smaller projected supplies. It is discouraging that the industry can only improve prices through liquidation. The industry must focus attention to the demand side of the equation for long term health.



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