Higher cattle prices and profit opportunities for producers eventually cause cyclical trend shifts from liquidation toward expansion. That has not yet happened in this cattle cycle, according to the U.S. Department of Agriculture’s mid-year inventory report, released July 20.

USDA estimates that all cattle and calves in the U.S. totaled 105.8 million head on July 1, down less than 1 percent from a year earlier. The Livestock Marketing Information Center reports that was the smallest July 1 count since 1990, and a reduction of 7.2 million head from the
cyclical peak in 1995.

LMIC analysts also note that this cattle cycle has already extended beyond the normal 10-year time frame. As of Jan. 1, 2002, the U.S. cattle and cowherd will most likely post another year?to?year decline, making the current cattle cycle 13-years long and counting.

Industry analysts have expected to see evidence of producers expanding their herds, but as of July 1, 2001, the U.S. industry had not started the cowherd rebuilding process.

According to the inventory report, the number of cows and heifers that calved, as of July 1, was down 200,000 head, or a little less than 1 percent, from a year earlier. The number of beef cows reported in the U.S. was the smallest since 1991. Of 11 individually reported states, only California and South Dakota reported more beef cows than a year ago. Two states, Montana and Colorado, reported a year-to-year increase in beef cows last year but now have fewer beef cows than two years ago. The LMIC report attributes this shift to the effects of drought.

The number of heifers held for beef cow replacement purposes declined compared with last year, after showing signs of increasing in January’s report. In its July report last year, USDA listed heifers held for beef cow replacement at 4.6 million head, down 2 percent from a year ago. Then, in the January report, the number of heifers held for replacement appeared to increase slightly. LMIC notes that drought, high winter feeding costs, and front-page news on disease problems in Europe probably caused producers to re?evaluate their heifer calf retention plans during the first half of 2001.

USDA estimates the 2001 calf crop at 38.4 million head, down about 200,000 head from the 2000 calf crop. Aggressive placements of cattle into feedlots during the first five months of 2001 reduced the estimated supply of feeder cattle outside feedlots by 866,000 head, 2 percent fewer than July 1, 2000.