You've reached the Virginia Cooperative Extension Newsletter Archive. These files cover more than ten years of newsletters posted on our old website (through April/May 2009), and are provided for historical purposes only. As such, they may contain out-of-date references and broken links.
To see our latest newsletters and current information, visit our website at http://www.ext.vt.edu/news/.
Newsletter Archive index: http://sites.ext.vt.edu/newsletter-archive/
Cattle Numbers Update
Livestock Update, September 1997
Bill McKinnon, Animal and Poultry Sciences, Virginia Tech
Both the July 1 U.S. Cattle Inventory Report and the August 1 Seven State Cattle on Feed Report individually offer insightful information to cattle producers. When the two reports are considered together they offer some evidence of longer term price strength.
The Cattle Inventory Report documents the significant herd reductions that have taken place since 1995 fueled by drought, high grain prices and poor economics. The numbers reinforce the previous trends in reduced heifer retention. There were dramatic increases in heifers being placed on feed last fall instead of going back into the cow herd. The inventory report also shows a smaller available feeder cattle supply this fall as evidenced by the 3% smaller number of steers over 500 pounds and a 2% smaller calf crop this year as compared to 1996.
| Cattle Inventory Report July 1, 1997 | |||||
|---|---|---|---|---|---|
1997 | 1996 | 1995 | 1997 as a % of 1996 | 1997 as a % of 1995 | |
| 1000 Head | |||||
| All cattle | 108,800 | 111,500 | 113,000 | 98% | 96% |
| All cows | 44,000 | 45,000 | 45,600 | 98% | 96% |
| Beef cows | 34,700 | 35,600 | 36,100 | 97% | 96% |
| Dairy Cows | 9,300 | 9,400 | 9,500 | 99% | 98% |
| Beef Replacement Heifers | 5,300 | 5,500 | 5,700 | 96% | 93% |
| Steers > 500lbs | 14,600 | 15,100 | 15,400 | 97% | 95% |
| '97 Calf Crop | 38,800 | 39,586 | 40,211 | 98% | 96% |
The August Cattle on Feed Report bore out the perception that much of the industry had about the rapid rate of placing cattle on feed since late spring. The appetite of cattle feeders was fueled by the good margins made on the cattle placed on feed in late 1996. When the "on feed" and placement numbers are at first measured against comparable 1996 figures, it might be easy to rationalize that the 1996 levels were abnormally low due the record high feed prices. The July placement number of 118% over July 1996 could be discounted until it is demonstrated that the July placements are actually 123% of the average for the 1992-96 average.
| Cattle on Feed Report 7 States August 1 | |||||
|---|---|---|---|---|---|
1997 | 1996 | '92 - '96 Average | 1997 as a % of 1996 | 1997 as a % of '92-'96 | |
| 1000 Head | |||||
| On Feed, July 1 | 7,679 | 6,578 | 6,949 | 117% | 111% |
| July Placements | 1,751 | 1,483 | 1,432 | 118% | 122% |
| July Marketings | 1,832 | 1,678 | 1,603 | 109% | 114% |
| Other Disappearance | 42 | 46 | 54 | 91% | 78% |
| On Feed, August 1 | 7,556 | 6,337 | 6,723 | 119% | 112% |
The initial reaction to the cattle on feed report was a hard hit on fourth quarter fed cattle futures. Correspondingly, Virginia cash feeder cattle sales also moved downward the week after the report. Further pressuring feeder cattle prices have been continued reports of a corn crop under some stress.
The two cattle reports taken together seem to indicate the feeding industry is using up a reduced feeder cattle supply at an increased rate. When this relationship is coupled with the prospects of cow/calf folks considering the rebuilding of herds this fall by retaining heifers; the outlook for feeder cattle would seem to be some brighter into 1998. The industry may have to work its way through some burdensome fed cattle supplies this fall which may take some of the early projected feeder cattle prices down a notch or so. After the fall of 1996 it is little hard for the feeder cattle producer to complain too much.