Semi-annual Cattle Inventory Summary

Ron Plain
University of Missouri
April 27, 2014

USDA's semi-annual cattle inventory survey for January 2015 revealed an end to the herd reduction that began in 2007. Record high cattle prices in recent years have caused a reduction in cow and heifer slaughter. Increased female retention is producing a larger calf crop and herd growth. Barring something unexpected, herd expansion is likely to continue through 2016.

Revisions. There were a large number of upward revisions to last year's estimate of the January 2014 cattle inventory. The total cattle inventory was revised up 796,000 (0.9%). The beef cow inventory was revised upward by 43,000 (0.1%). Beef replacement heifers was increased by 80,500 (1.5%) and dairy replacement heifers increased by 9,500 (0.2%). The number of other heifers was raised by 128,000 (1.5%). The number of steers over 500 pounds was increased by 253,000 (1.6%) and the number of bulls over 500 pounds increased by 3,000 (0.1%). The number of calves weighing less than 500 pounds was increased by 280,000 (2.1%). Despite all of these increases in the January 2014 inventory, the size of the 2013 calf crop was revised down by 200,000 head (0.6%).

Total Inventory. The total number of cattle and calves in the U.S. on January 1, 2015, was 89.8 million head, up 1.4% from 2014, but 7.0% lower than at the last cyclical peak in 2007. This is the second smallest January cattle inventory since 1952.

Calf Crop. The 2014 calf crop is estimated to be 33.9 million head, up 0.5% from a year earlier and the second smallest calf crop since 1949. This is the first year-to-year increase in the calf crop since 1995.

Cow Herd. The inventory report shows that the number of beef cows that have calved (29.6931 million) was 2.1% larger than on the same date last year. The number of dairy cows that have calved (9.3069 million head) was up 1.1% from a year ago. The combined cow herd is 1.8% larger than in January 2014.

Replacement Heifers. There were 5.7774 million beef heifers being held on January 1 to add to the cow herd, 4.1% more than in January 2014. The number of dairy replacement heifers, 4.6154 million head, was up 1.5% from 12 months earlier. The combined number of replacement heifers is up 2.9% from a year-ago. The number of beef heifers expected to calve in 2015 is up 7.3%. The number of dairy heifers expected to calve this year is up 1.0%. When added to the inventory of cows that have calved, the data imply the 2015 calf crop should be roughly 2.2% larger than last year's crop. A 2.2% increase in the calf crop would be the largest since 1980.

Feeder Cattle Supply. At the start of the year, the number of steers weighing 500 pounds and over was up 0.7%; the number of 500 pound plus heifers not being held for cow replacements was down 0.2%; and the number of calves weighing less than 500 pounds was up 0.9% from a year ago. In total, the inventory of feeder cattle was 0.5% larger than 12 months earlier.

Cattle on Feed. The number of cattle on feed January 1 (13.093 million) was up 0.6% from a year earlier. The monthly cattle on feed report said the number on feed January 1 in feedlots with one-time capacity of 1,000 head or more (10.69 million) was up 0.9%. Thus, the number of cattle on feed in feed yards with one-time capacity of 999 head or less (2.403 million) was down 1.0% from the start of 2014. The small feedlots' share of the total number on feed has been between 17.4% and 20% since 2000.

Cattle Slaughter. For 2015, fed slaughter is expected to be 1.5% to 2% lower than a year ago. Slaughter of cull cows is expected to be 1% lower than in 2014.

Summary. Profits for cow-calf operations are good and the herd is growing. Breeding herd numbers imply the January 2016 inventory will be roughly 3% larger than the 2015 number. Higher inventories will eventually mean lower prices. For 2015, the reduction is female slaughter should more than offset the slight increase in the calf crop to keep prices at record levels. An increasing supply of competing meats is likely to put pressure on retail beef prices this year. I expect 2015 fed cattle prices will average in the upper $150s/cwt on a live weight basis with 2016 prices lower. Through February, 2015 U.S. beef exports were 11.4% below year-ago levels. Meat exports are expected to be lower this year because of a strong dollar. Domestic demand for beef was up 4.9% during 2014 compared to a year earlier. Domestic meat demand tends to go up and down with overall economic growth.

The data from USDA’s January cattle inventory report is in the table below.

Actual federally inspected cattle slaughter and prices for 2008 to 2014 along with forecasts of slaughter levels and prices in 2015 are given in the table below.

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