The annual Cattle report was released January 31st by USDA’s National Agricultural Statistics Service (NASS). It is a statistically-based survey of producers and the most detailed of the cattle industry. As of January 1, 2018, the U.S. herd totaled 94.4 million animals, 0.7% above 2017’s count.
Let’s summarize key details in that report. First, the 2017 U.S. calf crop at 35.8 million head was up 2% or 751,000 head from 2016’s. That was a revision lower by 500,000 calves from the NASS mid-year estimate. Still, the 2017 calf crop was the largest since 2009. Second, there are more “other heifers” (animals heading for feedlots rather than breeding herds) than a year ago (up 3.6% or 323,000 head). Third, the national beef cowherd was 1.6% above a year ago, and growth will continue to moderate in 2018 because the number of heifers held for breeding purposes declined (dropped 3.7% year-over-year as of January 1, 2018). Fourth, to begin this calendar year, the number of cattle grazing small grains pastures in Kansas, Oklahoma, and Texas was well below a year earlier (down 17% or 300,000 head).
In recent months, the number of cattle placed into U.S. feedlots has been bolstered by the large 2017 calf crop, poor small grains (e.g., wheat) grazing conditions in the Southern Plains and rather good demand for animals to put onfeed. The spike up in placements is a double-edge sword. In the short term, feeder cattle supplies outside feedlots as of January 1, 2018, were calculated to be below a year earlier (down 2.3% or 607,000 head), which tends to support prices. However, the placement pattern since last fall has put more slaughter cattle in the marketing window of late-May through mid-August than a year ago. Note that many of those animals are heifers. Those large marketings will likely pressure slaughter-ready steer and heifer prices, which are forecast to be below 2017’s. Those prices suggest dampened demand for feeder cattle late this spring on into the summer months.