Beginning the herd rebuilding clock

The story of what is going to occur within the beef cattle business has been clear for a while. Drought-forced beef cow herd liquidation has made the meat business smaller than it wants or deliberate to be. There will likely be sturdy market incentives to rebuild herd inventories when it’s potential to take action. Latest enchancment in remaining drought areas within the central and southern Nice Plains possible signifies that herd liquidation is ending. Residual drought stays a threat and drought might redevelop however the arrival of El Niño possible signifies that further drought impacts will likely be minimal. However, the meat cow herd is sort of certainly reducing in 2023 that means that the January 1, 2024, stage is anticipated to be the low from which the business will rebuild. Nonetheless, we will now take into consideration the timeline going ahead as cattle numbers stabilize and the business transitions to herd growth.

Step one to stabilizing the meat cow herd is the discount of beef cow slaughter and a decrease fee of cow culling. Following report beef herd culling in 2022, beef cow slaughter is down 11.5% to date in 2023, an indication that herd liquidation is slowing. Nonetheless, I think that, till just lately, the lower in complete beef cow slaughter was masking some continued liquidation within the drought areas of the Plains. The present fee of beef cow slaughter, if it persevered for the whole yr, would end in a herd culling fee of almost 11% for the yr…too giant to point herd growth. Beef cow slaughter is anticipated to lower extra sharply within the second half of the yr. 

The definitive indication of herd growth will likely be indicators of heifer retention. Proper now, no such indicators exist, although I think that some heifer retention is starting. In actual fact, heifer slaughter so far in 2023 is fractionally greater than final yr’s elevated stage. After all, the lowered heifer feedlot placement that follows elevated heifer retention will present up as decrease heifer slaughter solely after a number of months. USDA’s July Cattle stock report often is the first signal that reveals an elevated stock of beef substitute heifers. The report will likely be launched July 21, 2023. Heifer slaughter is anticipated to start out declining within the second half of the yr.

The January 1, 2023, stock of beef substitute heifers, consisting of bred heifers calving this yr and substitute heifer calves to breed for 2024 are each at very low ranges. The bred heifer stock is the bottom since 2011 and the stock of substitute heifer calves is the bottom within the 23 years of information out there. The variety of substitute heifers just isn’t sufficient to forestall extra herd liquidation this yr and sure not sufficient to do greater than stabilize the meat cow herd in 2024. The large push for heifer retention will possible start with weaning heifers this fall. These heifers will likely be bred in 2024, calve in 2025 and start to extend beef manufacturing in 2026. It doesn’t appear potential to hurry up the timeline. 

Within the meantime, heifer retention and lowered beef cow slaughter will scale back cattle slaughter and beef manufacturing. Within the final herd growth that started in 2014, complete cattle slaughter in 2015 dropped to the bottom ranges since 1963, ensuing within the lowest beef manufacturing since 1993. We will anticipate analogous reductions in cattle slaughter and beef manufacturing in 2024 and 2025 not less than. Elevated heifer retention will pull feedlot inventories down sharply and preserve them low for the anticipated three years of heifer retention that will likely be wanted for the subsequent herd growth. With drought seemingly on its heels, the method of herd rebuilding is poised to start.