As reported by USDA’s National Agricultural Statistics Service (NASS), the U.S. cattle herd increased for the third consecutive year during 2016, adding 1.6 million head over the course of the year, a 2% gain. The increase was not as big as 2015, when 2.8 million cattle were added to the herd. The big difference between 2015 and 2016 was the accelerated pace of cattle marketings from feedlots during the past year. Year-over-year Federally Inspected steer slaughter increased by 1.2 million head in 2016 and heifer slaughter was up 300,000 head. In 2015, steer slaughter was unchanged from the year prior and heifer slaughter declined 1.0 million head which augmented an increase in calves that were born from 2014 to 2015.

The U.S. beef cow breeding herd was up one million head as of January 1st compared to a year earlier, a 3% increase. Dairy cow numbers grew by 39,000 head over the course of 2016, a change of less than half a percent. Nationwide, calves born in 2016 were up 1 million head or 3% from 2015’s. 

Generally good regional forage and pasture conditions in recent years led to some rather dramatic changes in cow numbers by state. Most notable were Oklahoma, Texas, Missouri and New Mexico. In the last year, the beef cow population in Oklahoma increased by 172,000 (+9%), Texas was up 170,000 (+4%), Missouri gained 150,000 (+8%) and New Mexico increased 50,000 (+12%). The opposite situation was seen in some Southeastern states that were dealing with drought during 2016. Mississippi beef cows declined 24,000 head (-5%). Year-overyear, beef cow counts in Georgia and South  Carolina dropped 8,000 head (-2%) and 5,000 (-3%), respectively.

The biggest surprise in composition of the cattle herd at the beginning of 2017 was the number of heifers being held for beef cow replacement purposes. That category of the cattle herd was estimated by NASS to be up 1% from a year earlier. Market expectations were generally for a decline of 5%-7%, driven by the trend in calf prices, which posted a 50% decline from the peak in the spring of 2015 to the fall of 2016. Individual states that reported change contrary to expectation were North Dakota (+23,000) head, South Dakota (+20,000), Montana (+20,000), Texas (+20,000), Kansas (+20,000), and Missouri (+15,000). States apparently showing more sensitivity to declines in cattle prices reported heifers for beef cow replacement below a year ago were Oklahoma (-15,000) head and Idaho (-20,000).

Steers and heifers counted weighing over 500 pounds were close to unchanged from a year earlier. That was a minor surprise, as the increase in steer and heifer slaughter during 2016 was expected to bias the count of these cattle to the downside. Such was not the case, as the cattle industry continues to show signs of improving efficiency at getting calves to gain weight quickly after weaning, and having bigger calves at weaning. So, the 1 million head year-over-year increase in calves born during 2016, steers and heifers less than 500 pounds were up only 300,000 head from the start to the end of 2016.

The supply of steers and heifers outside of feedlots to start 2017 is calculated to be up 2% from a year earlier, the second consecutive annual increase. A year ago, that increase was 5%. It is worth noting that if heifers retained for beef cow replacement had come in as expected, the supply of steers and heifers available to be placed into feedlots would have been up 4% on January 1, instead of 2%.