Cattle numbers are down again, to their lowest level since 1952, according to USDA's recent inventory count. Beef cow numbers are at their lowest level since 1962 as the devastating impacts of the 2012 drought continues the longer-term decline. Beef cow numbers were down three percent in 2012 and 11 percent since 2007. The drivers have been high feed and forage prices, persistent drought in the Southern Plains, and of course the widespread Midwestern drought of 2012.
The 2012 drought was the primary driver of the decrease last year as it destroyed pastures and forage supplies and catapulted corn, sorghum, and soybean meal prices. The impacts were largest for producers in the Southern Plains where beef cow numbers dropped by 9 percent last year and in the Central Plains were numbers were down 6 percent. These two regions had a decrease of 860,000 cows. Likely some of those cows moved to the Northern Plains where rain was more abundant and cow numbers expanded by four percent, totaling about 170,000 cows.
The 2012 drought was just the latest event to result in the liquidation of cows that has been accelerating since 2007. Nationally, the beef cow herd has dropped by 3.6 million head (11 percent) with reductions in all regions except the Northern Plains. It has been difficult for the beef industry to compete for high priced feed and limited land that is being converted to corn and soybean production. The Southern and Central Plains have led the way with a 1.9 million head reduction since 2007, followed by declines of 700,000 head in the Southeast, and 680,000 head in Corn Belt states.
What will it take to turn the herd decline around? The answer is more rain, more crop production, and more pasture and forage production. Larger crop and forage production would increase availability and lower prices of these critical feedstuffs. Given the small size of the calf crop, this would bolster calf prices. A second condition beef producers would like to see before expanding is some assurance that feed prices will have an overall moderation in coming years, not just a one year decrease.
USDA found evidence among producers that they were getting positioned to begin expansion. The number of beef heifers being saved for herd replacement was up two percent. There is a general feeling that cattle prices could be very strong in coming years due to small per capita beef supplies. If weather moderates, several profitable years are anticipated for cow-calf producers.