K-State’s Glynn Tonsor Says the Trigger Has Yet to Be Pulled on Herd Expansion

Listen to Ron Hays talk with Glynn Tonsor about herd expansion and more.

Senior Farm and Ranch Broadcaster, Ron Hays, is visiting with Kansas State University Extension Livestock Market Economist, Dr. Glynn Tonsor, about the heifer numbers in the latest Cattle on Feed Report and Meat Demand Monitor.

Looking back at the October Cattle on Feed Report, “Heifer inventory was up one percent versus the year before, and heifers composed 40 percent of the total inventory, so the remaining 60, of course, were steers, but anytime we have that high of a percentage for the inventory then that is historically, at least, a pretty strong signal that ranches are not keeping their heifers at home and they are still finding their way to the feedyard,” Tonsor said. “It is another fairly direct signal, at least to me, that nationally we have not pulled the trigger on expansion.”

Tonsor said there is a lot of discussion about herd rebuilding, and while some ranches are in the process of rebuilding, collectively, the national cattle on feed-based numbers signal that herd expansion has not begun.

“I do think in ’24 and ’25 we are going to be in the process of rebuilding the herd,” Tonsor said.

One study that Tonsor conducts on a regular basis is feedlot profitability. His latest numbers suggest there is still profit out there in the feedlot sector, but not as much as a few weeks ago.

“Through Christmas, we are expecting positive returns for steers that will be leaving Kansas yards, and then it is kind of a mixed bag as we go through the first half of 2024’s projections,” Tonsor said. “They are small losses to small gains. The main thing to probably highlight here is that compared to a month ago, at least on the front end, these four-to six-month projections, they are a fair amount lower than they were before.”

There has been a $7.00, if not $9.00, cwt pullback in the projected fed cattle price in recent weeks. Tonsor’s statistics are for cash prices and do not include risk management.

Switching gears to the Meat Demand Monitor, Tonsor said the latest information shows that domestic beef demand in August was up 3 percent versus August of 2022. Foreign demand for U.S. beef was down 9 percent in August compared to August of 2022, he added.

“For over a year now, consecutively, we have had a pullback in foreign demand for U.S. beef…,” Tonsor said.

To view the latest Meat Demand Monitor, CLICK HERE.

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