The highly anticipated USDA Cattle Inventory report released on the final day of January showed pre-report expectations were nearly spot-on with their predictions. The nation’s beef cow herd has shrunk over the past ten years and now sits at its lowest level in the data series’ 50-year history.
Although this was not a surprise to many industry experts, 28.9 million head of beef cows were accounted for as of January 1, 2023. That is a four percent drop from the beginning of 2022 and was likely a result of several factors.
- Beef cow cycle.
- Widespread drought over several years.
- Increased processing speeds at the packing plants.
DTN Livestock Analyst ShayLe Stewart has been eyeing the release of the report for several weeks. She believes the news is bullish and has good potential to send the markets soaring.
“Cattlemen knew that there were going to be significantly fewer beef cows reported in Tuesday’s report than compared to a year ago,
as a lack of profitability and severe drought conditions pressured ranchers to cull their cow herds dramatically,” said Stewart.
“But what Tuesday’s report solidifies is that not only do we have ‘fewer’ beef cows in the industry than compared to years past, but also that we have the fewest beef cows ever recorded. That’s a stark reality to stomach and a factor that should send the cattle market soaring.”
In total, the overall inventory from the January 1st headcount found the U.S. has 89.3 million head of cattle within the nation’s border. That alone is a 3 percent reduction in a 52-week window. Some the states with the highest headcounts were Texas, Nebraska, Kansas, California, and Oklahoma as every one of those states other than California felt a reduction of 2 percent or more, when compared to the beginning of last year.
A similar story was told of the beef cow numbers as Texas, Oklahoma, Missouri, Nebraska, South Dakota, Kansas, Montana, Kentucky, North Dakota, and Florida rounded out the top ten states for beef cow inventory. Only one of those states (Missouri) had the same number of beef cows as compared to a year ago, and the other states saw decreases in their beef cow herds anywhere from 1% to 7%.
Going hand in hand with that reduction was the nation’s calf crop dropping two percent at 34.4 million head.
DTN’s Shayle Stewart said, “In conclusion, Tuesday’s report comes as an extremely bullish factor to the cattle market and the beef industry. Tight supplies amid strong demand beckon for prices to become stronger, and stronger prices will likely be the theme of the market over the next two to potentially three years until the market sees substantial build back.”
USDA’s official report can be found here.