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Livestock expansion unlikely until 2025, economists say

Despite some market signals that usually result in expansion, cattle and hog producers are likely to wait until at least 2025.

Numbers are down for a variety of reasons in the cattle industry, says Derrell Peel, Extension livestock marketing economist with Oklahoma State University.

Those factors include drought conditions throughout much of the country.

“I haven’t seen anything starting despite these record high prices we’re seeing for calves,” he says. “Those price signals usually get expansion going, but it hasn’t happened yet.”

Thousands of cows were culled in 2023 and going into 2024 because of drought. Producers struggled to find adequate grass to maintain the cattle inventory.

“They had to make a difficult call,” Peel says.

Because of the record prices last year, he says many producers sold heifers to take advantage of that income. Peel says because of that, it’s going to take longer to rebuild the herd.

“Last year’s beef cow herd was the lowest we’ve seen since 1961, and we have the lowest total inventory since 1951,” he says. “I think we’ve fallen farther than we intended to fall.”

Peel says this month’s USDA Cattle on Feed report should provide some answers when it comes to the percentage of steers and heifers in the feedlot.

“Heifer slaughter numbers remain pretty high. We’ll have to see what it says in the next report,” he says.

Weather will also continue to be a factor in cattle numbers. He says while some parts of the country that were suffering from severe drought have received moisture, other regions remain very dry.

“Because of that, I think you will see more liquidation in 2024,” he says. “You have to remember that the heifer born in 2024 won’t be bred until 2025 and she will calve in 2026. That animal won’t be available for market until 2027. Our numbers are historically low, so the process will be slow.”

Peel says the cow herd may begin to grow slightly in 2025, adding calf prices should remain high.

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