Beef Buzz News
LMIC's Katelyn McCullock Previews the 2020 Cattle Inventory Report and Expected Beef Cow NumbersSat, 11 Jan 2020 10:40:44 CST
A lot of folks are looking ahead to the 31st of January. That's when USDA will release the Semi-Annual Cattle Inventory Report.
Katelyn McCullock is the Director of the Livestock Market Information Center based out of Denver. She says that that report likely to show a smaller U.S. beef cow herd compared to a year ago, "Well, we've been looking at the slaughter data all year. And that would suggest that on January one, we should expect a smaller beef cow herd than last year. Now, if you look at federally inspected beef cow slaughter, we spent quite a few weeks in late 2019 over 70,000 head a week. But over the year beef cow slaughter is up about 5%. When we look at what beef heifer slaughter has done, that was up about 6.7%. That means likely two things; that there's not going to be as many beef cows available, but we also don't have as many replacements available.
"LMIC right now is penciling a number down about point 7% for the beef cow herd, so probably under 1% not quite 1% below a year ago, but somewhere in between half a percent down to one full percent, and then that beef heifer replacement number, we would also expect to see another significant decline this year. Probably somewhere in the neighborhood of 3 to 4%, below a year ago. The other adjustment we're thinking about making, and are expecting maybe in the January one report; the calf crop to be revised slightly lower based on the storms that affected calving, so we faded that July one calf crop figure down half a percent for the January one number.
"I would also note that culling beef cows have been much more aggressive in some areas than others. Poor calf prices, poor winter feed quality, specifically hay in some areas, could also be contributing factors. So it's probably not affecting the country all the same, but when you look at the aggregate. Those are the numbers we're looking at."
"With the cattle inventory report coming out, the 31st of January producers will be focused on profitability. McCullock says she thinks cow/calf returns will be better in 2020, "With a smaller calf crop, calf prices are expected to improve. They took quite a hit with the Tyson fire and never recovered quite the same way some of the heavier feeders did. And we expect imports of beef to flow into the U.S. as China soaks up some of those supplies from the major exporters around the world, due to that protein deficit created by ASF. And that in turn should really increase the cull cow value here in the U.S. So those factors are all going to shape what 2020 looks like, and what to expect next year."
McCullock also writes on her website, LMIC.info, about the Choice to Select spread and says she has learned some interesting things, "So in the middle part of 2019 we really saw quite a bit of divergence between the percent of cattle grading choice and the percent of cattle grading select. The percent of Choice-rated cattle, was declining at a steeper rate than normal, and compared to many were grading Choice, there was a fairly large gap there. That had widespread implications all year. We saw the Choice select spread increase rapidly and hold very steady with very strong; strong price spreads there throughout the year. Now, I think there was a lot of factors combining to make that happen. You know, in market analyst circles, we've talked about things like body conditions, that struggle to keep up after a fairly harsh winter. Is it feed-related? Is it some struggles with health issues? It didn't seem like one particular thing could really cause that big of a difference in what we saw in the grading percentage.
Especially when we know genetic wise we've pushed towards better and better cattle, you wouldn't think to see that big of a change without some sort of large implication. But I don't think we've necessarily as a market, determined exactly what specifically caused that, and that leads me to believe that was probably more than a factor of things. Now one thing we have noticed, though, is that we have seen quite a bit more product going to these branded programs, and some of that could be affecting what we see in the mix. Those are going to be the upper echelons of grading cattle, you know they're going to be top two-thirds of choice, they're going to be possibly some prime products and so all that factors in. There are kind of better quality grade cattle still in the marketplace. Now that in the fourth quarter we've seen those numbers shrink a little bit. Now that's probably too small of a time frame for to blame it on something like genetics, it's gotta be something more environmentally, and that's where we keep coming back to you know, was it a weather-related issue that's hungover from last winter? Was it some feed quality issues? That kind of thing, because it really has come back in line in a relatively short period of time."
Click on the LISTEN BAR below to hear the complete interview with Katelyn McCullock as she talks With Ron Hays.
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