Senior Farm and Ranch Broadcaster, Ron Hays is at the 2023 Cattle Industry Convention visiting Lance Zimmerman of Rabobank about the latest cattle inventory report released by the USDA.
“When you look at the pre-report estimates and what came out, it was very much in line with expectations,” Zimmerman said. “Basically, every single top-line number was within a couple of tenths of a percent of where everybody kind of thought. The headline one being the beef cow number down four percent and basically a cowherd that is back at the levels we were at in 2014.”
Among other things, Rabobank tracks the percentage of the cowherd that is in drought, Zimmerman said, and the percentage of the cowherd in drought was similar to the years 2012 and 2013 when the last major liquidation took place.
“It is headlined by Kansas, Oklahoma, Texas, and that drags that cowherd down hard with the drought pressures we saw there,” Zimmerman said.
A few things jump out in the latest report, Zimmerman said, starting with large numbers of cattle placed on feed through the course of the year. Cattle on feed supplies, he added, will be adequate through the rest of this quarter and through the first few months of the second quarter, but then the big declines are going to come.
“We are going to finally, I guess you could say, pay the price for cowherd liquidation that has been happening since 2019,” Zimmerman said. “So, expect for things to feel pretty normal here for the next several months. Adequate on feed supplies, reasonably strong feedlot inventories, but then the push is really going to come after that. We are going to be struggling to fill feed yards.”
With inflation and adequate supplies of other proteins such as chicken and pork, Zimmerman said that when beef prices rise due to low inventory, it may be difficult to pass those higher prices onto consumers.
Oklahoma and surrounding states yielded large numbers of beef cow inventory lost in the report. Oklahoma is down 140,000 cows, Texas is down 125,000 cows, Kansas is down 106,000, and Nebraska is down 99,000 beef cows compared to a year ago.
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