Cattle Outlook: Calf crop down for 16th consecutive year

USDA’s January cattle inventory survey said there were 90.8 million cattle in the U.S. at the start of 2012. That is 2.1% fewer than year before and the lowest cattle inventory since 1952. The 2011 calf crop was put at 35.3 million head, down 1.1% from the year before, down for the 16th consecutive year, and the smallest calf crop since 1950.

The beef cow herd totaled 29.9 million head at the start of the year, down 3.1% from January 1, 2011. Milk cow numbers were up 0.9%. The number of beef replacement heifers was up 1.4%. Dairy heifers kept for replacements were down 0.9%. The combined total of cows and replacement heifers expected to calve this year implies the 2012 calf crop will be 1.9% smaller than in 2011.

At the start of 2012, the number of steers 500 pounds and over was down 2.0%; the number of 500 pound plus heifers not being held for cow replacements was down 2.2%; and the number of calves weighing less than 500 pounds was down 2.8% from a year earlier. In total, the inventory of feeder cattle was 2.3% smaller than 12 months earlier.

The number of cattle on feed in the U.S. at the start of 2012 was up 0.8% from a year earlier. The monthly cattle on feed survey of large feedlots said their inventory was up 3.0%. Thus, the number on feed in smaller lots, which are only surveyed every six months, was down 9.5%. The big difference between small (down 9.5%) and large (up 3.0%) feed yards means the monthly cattle on feed numbers do not match well with fed cattle slaughter.

Beef cutout value was lower this week. On Friday morning, the choice boxed beef carcass cutout value was $183.12/cwt, down $1.05 from last week. The select carcass cutout was down $1.07 from the previous Friday to $178.14 per hundred pounds of carcass weight.

Fed cattle prices were higher this week on light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $123.77/cwt, up 77 cents from last week and $18.00/cwt above the same week last year. Steer prices on a dressed basis averaged $200.00/cwt, up $29.92 from a year ago. There was no dressed price quote a week ago.

This week’s cattle slaughter totaled 589,000 head, down 3.1% from the week before and down 6.1% compared to a year ago.

Feeder cattle prices across the country this week were mostly steady to $6 higher than last week. The Oklahoma City auction prices were $2 lower to $2 higher with the ranges for medium and large frame #1 steers: 400-450# $193-$202, 450-500# $193-$202, 500-550# $179-$186, 550-600# $172-$183.50, 600-650# $162-$174, 650-700# $154.50-$157.82, 700-750# $150-$158.25, 750-800# $146-$155, 800-900# $138-$150, and 900-1000# $133-$140/cwt.

The February live cattle futures contract settled at $123.62/cwt today, down $1.08 compared to last Friday. The April contract closed at $127.40/cwt, down $1.05 for the week.

Source: Ron Plain