By Glynn T. Tonsor
On January 31st USDA released the much anticipated January Cattle Inventory Report.[1] Last week's In The Cattle Markets article provides a national overview of the main points including additional confirmation of shrinking cattle supplies and initiated (albeit lower than many expected) herd expansion via heifer retention.
A targeted regional assessment of multi-year adjustments can shed additional light on transitions underway in the industry. Tables 1 and 2 were derived to present estimates of herd size statistics individually for the 10 states currently with the largest beef cow herds as well as regionally and nationally. Values are presented to enable easy comparison not to last year but rather to the pre-drought period, 10 years ago, and 20 years ago. This reveals broader trends that can easily be missed by looking solely at year-over-year adjustments. While the recent drought experienced in several key cow-calf production areas certainly has important ongoing implications, further comparing the current situation to that of 10 and 20 years ago reveals additional industry adjustments underway.
A review of table 1 reveals how remarkably stable the geographic dispersion of the beef cow herd was over the 1995-2010 period. Adding the recent drought and heifer retention patterns (table 2) enriches current understanding. In total head the Great Plains followed the national trend of downsizing over the 1995-2010 period, yet its relative role as home to beef cows and heifers being retained was growing prior to the drought and remains higher than 2010. This suggests the Great Plains is a "growth area" in terms of its role in the national industry. Conversely while the share of the country's beef cows has been stable in the Southeast, this region has a longer history of a decreasing role in retaining heifers. Coupling this with recognition of this region being the main area with sizeable cow inventories containing pastures that broadly avoided drought conditions over recent years casts doubt on the likelihood of the Southeast leading national herd expansion. Between the patterns of these two regions is the Southern Plains. Prior to the recent drought, the herd in Texas was contracting while the herd in Oklahoma was expanding leading to limited net change in the region's collective role in the industry. However, since 2010 the portion of both beef cows and retained heifers residing in the Southern Plains has fallen notably.
Exactly how persistent these patterns are in coming years will be instructive to monitor. There currently are several indications that the beef cow herd may be moving north and west compared to how it has traditionally been dispersed within the country. Broadly speaking, the geographic adjustments at play are consistent with many of the characteristics depicting representative situations across regions.[2] Moreover, these changes are generally in line with estimated net present values of potential replacements faced by representative producers in each region.[3]
The characteristics not only of where cows reside in the U.S. but the managerial traits and situations of host operations are important to appreciate. If you are a stocker, feedlot, or packing firm seeking to source from a limited supply of cattle, recognition of these adjustments is critical.
Source:osu.edu