Beef Market Advisor

Saturday, February 04, 2006

Cattle Outlook

Glenn Grimes & Ron Plain,
University of Missouri - Columbia
February 3, 2006

The inventory of cattle and calves in the U.S. on January 1, 2006 was up 1.7%
from 12 months earlier. The number of cows and heifers that have calved was up
0.9%. Beef cows and heifers that have calved were up 1% and dairy cow numbers
were up 0.6%.

The number of beef heifers being held for breeding herd replacements was up 3.8%
and the number of dairy heifers being held for herd replacement was up 3.9%.

The 2005 calf crop was estimated at 0.7% more than in 2004. The number of young
cattle not being held for breeding herd replacement outside feedlots was 1.7%
larger than a year earlier.

The probabilities are high that we will continue to build the cattle herd for at
least a few years with near normal feed production.

Missouri is increasing the cattle herd at a faster rate than the U.S. The total
number of cattle and calves on Missouri farms January 1 was up 3.4% and the
number of cows that have calved was up 4.9% on January 1 compared to 12 months

The number of beef cows in Missouri that have calved was up 5.4%, but the number
of dairy cows that have calved was down 4.2% from the same date in 2005.

Heifers being held for breeding herd replacement in Missouri were up 15.5%. The
number of beef cow replacements being held in Missouri was up 17.2% and the
number of dairy cow replacements was up 7.7% from a year earlier.

The 2005 calf crop in Missouri was up 2% from 2004 this compares with a 0.7%
increase in the U.S. The largest beef cow state, Texas, grew their 2005 calf
crop from 2004 by 3%. Missouri and Texas account for 69% of the growth in the
2005 calf crop.

The current drought in Texas may impact their cow herd growth this year.
However, spring rain may compensate for the dry winter weather.

Fed cattle prices were pushed lower this week as wholesale beef prices weakened.
The average weighted live price for fed cattle for the 5 market area through
Thursday at $91.65 per cwt down $2.47 per cwt from 7 days earlier. The weighted
average carcass price for the 5 market are through Thursday was down $5.00 per
cwt at $144.45 per cwt.

Feeder steers and heifers at Oklahoma City were $1.00-3.00 lower than a week
earlier. Steer calves were $2.00 per cwt higher and heifer calves were steady.

The range in prices for medium and large frame number 1 steers at Oklahoma City
by weight groups were: 450-500 pounds $142.00-145.00 per cwt, 500-600 pound
calves $120.00-148.00 per cwt, 600-700 pound calves $110.00-125.75 per cwt,
700-750 pound calves $108-113.50 per cwt, 500-600 pound yearlings $124.25-140.00
per cwt, 600-700 pound yearlings $116.00-121.50 per cwt, 700-800 pound yearlings
$106.25-117.00 per cwt, and 800-1000 pounds $100.00-109.25.

Choice wholesale beef prices Friday morning at $148.55 per cwt was down $5.98
per cwt from 7 days earlier. Select beef was down $5.68 per cwt at $136.55 per

Slaughter this week under Federal Inspection was estimated at 602 thousand head
up 3.8% from 12 months earlier.

posted by Dr. Harlan Hughes 8:31 PM [edit]

Monday, January 30, 2006


Livestock Monitor

A Newsletter for Extension Staff From The Livestock Marketing Information Center

State Extension Services in Cooperation with the USDA

January 27, 2006

On Friday, January 27th, USDA-NASS released the January 1, 2006 annual Cattle report, which confirmed that cattle numbers cyclically increased in 2005. According to USDA, the estimated number of cattle and calves in the U.S. totaled 97.1 million head, 1.7 percent above a year ago and the largest since 2001. The reported cattle inventory was near expectations, however the annual percentage increase was a little larger than expected due to revisions to the 2004 inventory numbers.

Cow calf producers continued to rebuild the cowherd in 2005, prompted by another year of favorable cow-calf returns and good pasture and range conditions in most regions of the U.S. Nationally, as of January 1St, there were a total of 33.3 million beef cows in the U.S., up one percent or 338 thousand head from 2004's. The dairy cowherd was also larger, however the year-to-year increase was not as large with dairy cow numbers up only 0.6 percent.

Importantly, USDA estimated the number of heifers over 500 pounds being held for replacements was up 2.1 percent, with beef cow replacements at 3.8 percent higher than a year ago. At 5.9 million head, the number of heifers held as beef cow replacements was the largest since 1997.

Both the number of steers over 500 pounds and the number of calves under 500 pounds were notably larger than a year ago, about 3 percent higher for both categories. The 2005 calf crop was reported at 37.8 million head, around one percent larger than 2004's and in line with the July 1, 2005 estimate. These inventory numbers suggest year-to-year increases in U.S. beef production for 2006 and 2007.

According to USDA, the number of cattle and calves on-feed in all U.S. feedlots totaled 14.1 million head, 3 percent larger than 2004's. Adjusting that number for cows and bulls in feedlots based on monthly USDA data for feedlots with 1,000 head or more capacity, places the calculated supply of steers and heifers (not identified as replacements) outside feedlots at 28.3 million head, about 1.7 percent larger (near 475,000 head) than the estimate on January 1, 2005. Still, the estimated feeder cattle supply outside U.S. feedlots remained below 2003's.

posted by Dr. Harlan Hughes 8:36 PM [edit]

Modest Cattle Herd Expansion Indicated

From the Oklahoma Cooperative Extension Service
January 27, 2006

Derrell S. Peel, OSU Livestock Marketing Specialist

The USDA Cattle report released Friday, January 27th indicates that a solid but moderate cattle industry expansion is underway in the U.S. The total cattle inventory for the nation was up 1.7 percent from a 2005 total that was revised lower. The increase is slightly higher in percentage terms than expected but very close to the absolute number indicated without the revisions.

The report also shows a one percent increase in the beef cow herd over a 2005 value that was also revised lower by 140,000 head. Total beef cows on January 1, 2006 were 33.25 million head. Beef replacement heifers were up 3.8 percent; again over a revised lower 2005 total. The result is that total beef replacement heifers on January 1, 2006 is roughly 65,000 head less than expected. The only surprise in the report is an unexpected 3.8 percent increase in dairy replacement heifers. The total U.S. calf crop in 2005 was up 0.7 percent as expected.

The total estimated supply of feeder cattle on January 1, 2006 is 28.2 million head. This is up 1.6 percent over 2005, mostly because of the 2005 revisions downward. The result is an estimated January 1 feeder supply that is smaller than 2001, 2002 and 2003 and only slightly higher than 2004 and 2005. The number of cattle on feed in the U.S. on January 1 was 14.1 million head, up 3 percent from one year ago.

These supply factors suggest a number of general indications for cattle markets in 2006. Total feeder supplies will remain tight and feeder prices are likely to stay strong. The ratio of January 1 cattle on feed to the estimated feeder supply is very high at 0.5; higher than 2004 and well above levels that occur at the price bottom of a cycle. For example in 1996, the ratio of January 1 cattle on feed to estimated feeder supply was under 0.39. The estimated feeder supply as a percent of 2005 calf crop is 74.7 percent, only fractionally higher than the 2005 value.
The second major implication is that herd expansion, while solidly underway is occurring at a modest rate and should not lead to rapid growth going into 2007. The beef replacement heifer value is a modest percentage increase on an absolute total that is the lowest in many years.

It appears that the supply fundamentals of the beef industry will remain solid well into 2007 and perhaps beyond.

posted by Dr. Harlan Hughes 9:54 AM [edit]

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