U.S. beef producers are beginning to shift toward herd expansion after years of liquidation, and reductions in cow slaughter and retention of more heifers for breeding will further tighten beef supplies for the next couple years. That was one message presented in the Cattle Fax Outlook Seminar during the Cattle Industry National Convention last week in Nashville.
Cattle Fax analyst Kevin Good said commercial cow slaughter during 2013 declined by about 200,000 head compared with the previous year. The group expects another year-to-year decline of 560,000 this year and 500,000 in 2014.
Citing the USDA’s January cattle inventory report, Good said beef replacement heifers on January 1 were up about 90,000 head from a year ago. By the same time next year, Good projects a much larger increase in replacement heifers of about 280,000 head.
Also as of January 1, the nation’s beef cow inventory, at just over 29 million head, was down by about 250,000 head from a year ago. By next January, Cattle Fax projects a year-over-year increase of about 200,000 beef cows.
Dairy cow inventories as of January 1 were about 10,000 head lower than a year ago. Over the next year,Cattle Fax expects dairy producers to add about 50,000 cows.
Steer and heifer slaughter during 2013 was down by about 300,000 head compared with 2012, Good said. Cattle Fax expects further declines of about 600,000 head this year and 700,000 head during 2015.
Good also noted that cattle feeders today are much more current in their marketings than they were a year ago. Strong fed-cattle prices, discounts in the futures market, a strong basis and a positive swap on feeder cattle have encouraged cattle feeders to market finished cattle on a timely basis.
Cattle Fax expects fed-cattle prices this year to range from the mid $120s per hundredweight to around $150, with an average around $135 per hundredweight. Calves are likely to average in the $190s per hundredweight and feeder cattle in the $170s this year.