Dr. Derrell Peel Discusses the Future of the Beef Cattle Herd Amidst High Heifer Liquidations

Listen to Ron Hays talking with Dr. Derrell Peel about the latest Cattle On Feed Report.

Senior Farm and Ranch Broadcaster Ron Hays talked to OSU Extension Livestock Market Economist Dr. Derrell Peel after the latest USDA Cattle on Feed Report was released on Friday afternoon, and despite reduced cattle numbers, cattle on feed are consistent with 2023 numbers, due in part to the number of heifers being fed.

Dr. Peel has been watching the quarterly report for many years and over the past couple of years he has anticipated that when herd rebuilding begins, the number of heifers in feedlots will fall.

“There was no decrease in this latest quarterly number,” Dr. Peel stated. “Once again, forty percent of all the cattle in the feedlot are heifers. That’s pretty close to where it’s been for the last several quarters telling us that we are continuing to market heifers as feeder animals rather than retaining them for breeding.”

According to Dr. Peel, this allows feedlots to hold numbers in the short run but has long-term implications for the overall industry and inventory. He anticipates an even smaller beef cattle herd in 2025 than this year’s which will constrict the pipeline for heifers even more.

“The most we could hope for next year is to maybe stabilize the herd at a very small level,” he commented. “Any potential growth in the herd is at least two years out from this year, in terms of the calendar year, and perhaps even longer.”

High heifer liquidations are due to the drought and diminished forage and water resources, but also the producer’s financial situation and the high prices that the heifers are bringing.

Even with a shrinking cattle herd, the amount of beef produced has been maintained fairly well. “We’ve continually revised our estimates of 2024 beef production,” Dr. Peel admitted. “We started about 4.5% down, then we kept cutting that back. We are to the point now where it looks like total beef production for 2024 will be equal to or a bit higher than a year ago according to USDA.”

He explained that it is all coming from the fed beef side, namely steer and heifer slaughter, which isn’t down as much as he would have expected combined with the fact that feedlots are increasing days on feed to grow the cattle larger before processing. He said that fed beef production comprises about 85% of total beef production and is up almost 2%. It is being offset by a sharp decrease in non-fed beef, cow and bull slaughter, which is down 13%.

“When you combine the two, we are holding on to a slim decrease of less than 1% down year over year in total beef production, but by the end of the year, we may be even with last year or a smidge higher,” he detailed.

The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR at the top of the story for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.

Verified by MonsterInsights