The numbers in the USDA’s January 1 cattle-inventory report, released on January 27, suggest continued short supplies and high prices for calves and feeder cattle. The report also hints, however, that the trend toward herd reduction could be starting to turn around.

The report shows all cattle and calves in the United States as of January 1, 2012 totaled 90.8 million head, 2 percent below the 92.7 million on January 1, 2011. This is the lowest January 1 inventory of all cattle and calves since 1952, when USDA recorded a total of 88.1 million head.

All cows and heifers that have calved were down by 2 percent from a year ago, while beef cows were down by 3 percent.

The drought and forage shortage across much of the south pushed large numbers of calves into feedyards rather than winter grazing programs. As a result, the total for calves under 500 pounds and other heifers and steers over 500 pounds outside of feedlots was 25.7 million head, down 4 percent. The number of cattle and calves on feed for slaughter, at 14.1 million head, was up 1 percent from a year ago.

Beef cows that calved were down 13 percent in Texas and 14 percent in Oklahoma

A state-by-state listing of all cattle and calves illustrates the effects of the drought, and differences in regional trends. Cattle numbers in Texas are down by 11 percent from a year ago, and numbers in Oklahoma are down by 12 percent. Cattle and calf numbers in Florida, Mississippi, Nebraska and Wyoming were up by 5, 6, 4 and 5 percent respectively.

Somewhat surprisingly, the report lists the number of cattle grazing on small-grain pastures in Kansas, Oklahoma and Texas as of January 1 at 1.59 million head, down just 1 percent from 1.6 million  a year earlier.

Nationally, the only number besides cattle on feed showing an increase was that for beef replacement heifers, which were up by 1 percent over one year ago. The increase suggests producers in areas with adequate moisture have begun responding to market signals to expand their herds or sell heifers as replacements, as female prices have posted significant gains recently.

A state-by-state listing of beef replacement heifer numbers again reflects regional differences in forage supplies. Oklahoma replacement heifers are down by 15 percent and the Texas figure is down by 10 percent.  In contrast, beef replacement heifers are up by 29 percent in Colorado, 17 percent in Iowa, 18 percent in Nebraska, 14 percent in South Dakota and 18 percent in Wyoming.

If weather conditions allow it, the trend toward more heifer retention is likely to continue and accelerate. Removing those heifers from the supply of feeder cattle means U.S. beef production will decline further over the next few years. If, for example, producers begin retaining more heifers in 2012, those heifers will not be bred until 2013 and will not deliver their first calves until 2014. Those calves will not reach finished weights and contribute to beef production until 2015.

View the full Jan. 1, 2012 Cattle Report online from USDA.