Some areas in the Southeast—primarily parts of Louisiana, Mississippi, Alabama, Tennessee, and up through the Appalachians—received hurricane/tropical storm-related rains during early September. While these rains improved prospects for some limited areas with cool-season pastures for this fall/winter─which, given hay prices, could help alleviate some of the drought-related cow-herd liquidation in those limited areas─the rains were not widespread enough to relieve most of the drought-affected areas. Pastures in other areas near the hurricane-lashed Atlantic Coast also benefited from hurricane Irene’s rain shadow, but again, were not widespread enough to affect more than limited local conditions. As a result, prospects for winter wheat pasture over most of the Southern Plains remain dismal at best over the near term. Hay prices have increased significantly, especially in Southern areas. Some of the failed corn was likely salvaged for feed in some areas. Farther north, areas of the Midwest became increasingly drier, further reducing current corn crop prospects.

One implication is that only the most valuable cows will justify expenses for hay supplies to feed them through the winter, and calves will likely continue being placed in feedlots, whether on growing rations or full feed rations. Those more or less typical placements of heavier calves and yearlings in feedlots—although probably not at weights as heavy as in a year with more normal precipitation—will likely go to market in late 2011-early 2012. The less typical, drought-induced placements of the lightweight portion of calves will not reach market weight—also likely to be somewhat low—and finish until early 2012. As drought-induced placements continue, they will contribute to already larger year-over-year marketings from feedlots of 1,000 head or more and commercial steer and heifer slaughter, which will exert some downward pressure on fed cattle prices until the extra placements are worked through.

The National Agricultural Statistics Service’s (NASS) United States and Canadian Cattle report released August 22 indicated a 2-percent decrease in July 1 Canadian cow inventories, but a 7-percent increase in beef replacement heifers. This 7-percent increase in beef replacement-heifer inventories is likely directed at capturing the earliest demand for breeding females and calves in 2013 and beyond. It appears that similar inventory adjustments could be occurring in the Northern United States. Although the January 1 NASS Cattle inventory report indicated some heifer retention in most Northern tier States, evidence thus far of Northern tier replacement heifer retention has been predominantly anecdotal. In either case, increased replacement heifer retention could position cow-calf producers in those Northern areas where there are adequate pastures and winter feed to take advantage of the anticipated reduced supplies of cows and feeder cattle, beginning in mid- to late 2012.