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Heifers And Cow Numbers Continue Decline

published: July 25th 2011
source: DesMoinesRegister.com

The U.S. Department of Agriculture’s midyear inventory of the nation’s cattle herds show a 1 percent decline from a year earlier as of July 1, to an even 100 million head.

Most significantly, the number of replacement heifers, those females destined to give birth to calves, was down 5 percent as the high cost of feed and the difficult conditions in drought-stricken southwestern states takes its toll and makes producers reluctant to increase the size of their herds.

Beef prices are up as much as ten percent for hamburger this year largely on tighter supplies..

Despite a monthly drop in cattle moving into feedlots last month, the number of older cattle sent to feedlots for their last four months of fattening before slaughter was up 3 percent to 12.2 million.

The USDA said this year’s crop of new calves will be about 1 percent lower than in 2010, to 35.5 million.

Cattle herds have tightened to their lowest levels in a half-century in the U.S. in the face of rising feed costs. At the same time, while domestic demand has remained constant export demand has been strong. The latest export figures show beef exports running almost 40 percent head of the 2010 pace and are likely to pick up further with revelations of radiation-contaminated beef in Japan.

Producers and packers have worked to get more meat supplies in storage. The USDA reported Friday that red meat supplies in commercial freezers were down 6 percent from June but up 17 percent from last year, reflecting the movement of a large number of heifers from calving to slaughter to take advantage of higher prices..

Frozen pork supplies were down 9 percent from the previous month but up 20 percent from last year. Stocks of pork bellies (used for bacon) were down 18 percent from last month but up 33 percent from last year.

Futures prices for live cattle ready for slaughter were up 55 cents per hundredweight to $110.55 Friday on the Chicago Board of Trade. Hog prices, stimulated by talk of Chinese purchases and hot weather that inhibits weight gain in pigs, were up $2.73 per hundredweight for August delivery to $100.83, the highest price since April.

Corn prices continue to react to weather reports. On Friday a new forecast for another round of hot weather next week in the Corn belt sent corn futures up 11 cents per bushel to $6.90 for September delivery and up 12 cents per bushel to $6.85 for December.