Cattle Inventory Report Reflects Herd Expansion
The U.S. cattle herd as of Jan. 1 at 89.3 million head was the smallest since 88.1 million head in 1952. The 2012 calf crop at 34.3 million head was the smallest since 33.7 million head were born in 1949. While both categories were slightly below the average pre-report guesses, neither was a major surprise.
The surprise in this report came from beef replacement heifers, which came in 2% above year-ago, signaling cattle producers have started rebuilding their beef herds. Much of the heifer retention is in areas outside of the Plains, with the exception of Texas, which had a heifer retention rate 9.1% greater than year-ago despite severe drought conditions. With more heifers being held back for breeding purposes, it points to less market supplies, which keeps the cattle market on pace for a 10-year cycle high later this year.
With the cattle inventory and calf crops coming in lower than anticipated and the start of herd rebuilding, the report data is bullish for cattle futures. This should help cattle futures build on this week's rebound off the recent lows.
| Semiannual Cattle Inventory Report | USDA | Avg. trade guess | Range |
| % of year-ago | |||
| All cattle & calves | 98 | 98.2 | 97.2-99.0 |
| Annual calf crop | 97 | 97.9 | 97.4-98.8 |
| Total Cows/heifers calved | 98 | 98.7 | 97.2-100.5 |
| beef cows/heifers calved | 97 | 98.5 | 96.4-100.7 |
| milk cows/heifers calved | 100 | 99.3 | 98.3-100.0 |
| Heifers 500 lbs. and over | 99 | 98.0 | 96.5-99.0 |
| Beef replacement heifers | 102 | 99.6 | 92.1-103.0 |
| Milk replacement heifers | 98 | 99.2 | 97.8-100.3 |
| Other heifers | 97 | 96.5 | 93.9-98.1 |
| Steers 500 pounds and over | 100 | 97.8 | 97.4-98.4 |
| Bulls 500 pounds and over | 98 | 97.3 | 95.0-99.5 |
| Calves under 500 pounds | 98 | 97.5 | 97.3-97.7 |
