Rainfall keeps cattle production uncertain, but as of Memorial Day, most of the pasture and rangeland around the U.S. (80 percent) was considered to be in fair, good or excellent condition. A notable exception was Montana, where the May 21, U.S. Department of Agriculture crop progress report shows that 62 percent of pasture and range there was in poor and very poor condition. Only 12 percent of the range in the state was rated above fair. Some parts of eastern and southeastern cow-calf states including Kentucky, Georgia and Florida are hurting for some rain as well.

Despite these regional threats of drought, optimism about moisture condition, profits and strong beef demand have analysts predicting this to be the first year of cowherd expansion. According to results of the annual Cattle-Fax cow-calf survey, one-third
of the producers surveyed expanded their herds last year. That positive outlook continues as 41 percent of those surveyed indicated that they plan to increase their herd size in 2001. There is little question that producers are doing that. Heifers as a percent-of-feedlot placements were below year ago levels for the fifth consecutive month in April and were 36.6 percent of placements, according to Cattle-Fax-figures, down 1.6 percent from last year.
Meanwhile, it is figured that 2001 will be the first year of national beef cowherd expansion, started by producers retaining replacement heifers. If a heifer was kept back this year instead of going on feed, the earliest she could produce a calf would be 2003. That calf wouldn't hit the fed cattle market until 2004 at the earliest. Therefore, it most likely will be 2004 or 2005 before there is any noticeable increase in beef production. Until that time, we'll continue to see high fed, feeder and calf prices. Lending even more support will be the reduction of available calves as we hold back more heifers. So, even though expansion is sure to occur this year, we have until 2006 to take advantage of the highest prices of the cycle. The bottom line is that if you're going to develop heifers to take advantage of this up swing in the cattle cycle you had better get to it.

Buying bred cows or cow-calf pairs will enable you to take full advantage of the price upswing before 2006. Producers taking advantage of that is why production female values remain strong.

Bred cows, bred heifers and cow-calf pairs usually peak seasonally in April. Spring fever may have ran its course as indications are that the seasonal highs have been met but values will no doubt remain high. As mentioned last month, cow slaughter rates running almost 10 percent above year ago levels in the midst of expansion are due to attractive prices. Cow offerings are expected to decline, and will continue to support slaughter cow prices.