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US cattle herd stagnate

Tommy

Well-known member
DJ SURVEY: USDA Cattle Inventory To Confirm Herd Stagnation



7:30 AM, February 1, 2007

By Jim Cote

Of DOW JONES NEWSWIRES

Agriculture Online



CHICAGO (Dow Jones)--The U.S. cattle herd was poised for rapid expansion in

2006, but drought and sharply higher feed costs combined to squash those

expectations.



Confirmation of a stagnant U.S. cattle population is expected in U.S.

Department of Agriculture semiannual cattle inventory report data, scheduled

for release at 3 p.m. EST (2000 GMT) Friday.



Analysts surveyed say the nation's cattle herd increased very little during

2006 and pointed to discouraged cattle producers as the reason.



"We think many producers in the Southern Plains threw in the towel during

2006, simply because they had little feed and water to feed their animals,"

said Dan Vaught, of AG Edwards and Sons. "The recent jump in corn prices and

the implications of hugely elevated future feed costs probably discouraged them

as well. We believe the overall cattle population has increased somewhat as a

consequence of the expansion that occurred from mid-2004 through early 2006 (as

reflected by the increase in the spring calf crop). Thus, we think the report

will state the Jan. 1 U.S. cattle population at about 100.5% of the beginning

2006 total."



Most analysts were in general agreement with that assessment.



"Overall, we expect the total cattle and calf inventory to be less than 1

percent above a year ago and the beef cow herd to essentially be unchanged from

a year ago," said Erica Rosa, of Livestock Marketing Information Center. "USDA

may make some revisions to the 2006 numbers."



And, a tiny increase in the calf crop does not bode well for swift expansion

in 2007.



"We expect little change to the 2006 calf crop," said Vaught. "We believe the

number of calves born during the second-half of 2006 actually came in modestly

below the comparable 2005 result, due in part to surging feed costs and in part

as a consequence of the drought that dominated the Southern Plains through late

2005 and much of 2006. We expect the first-half increase in the calf crop to

boost the Jan. 1 calf population modestly; we are forecasting a USDA result

about 74,000 head or 0.5% over the comparable year-ago total."



The 2006 drought and higher feed costs also encouraged cow owners to send

more beef cows to slaughter, according to some.



"Beef cow and bull numbers probably declined," Vaught said. "Beef cow

slaughter during the second half of 2006 topped the year-ago rate by over

300,000 head, or 24.4%."



Vaught projects a slight beef cow herd decline, which "was probably offset by

a modest increase in the size of the dairy cow herd." But, a decline in the cow

herd "would seemingly signal that the domestic ranching industry has quickly

moved away from expansion," Vaught said.



But, LMIC was a bit more optimistic.



"The very small year-to-year decline in LMIC-estimated beef cow numbers could

translate into a return to slow beef cowherd rebuilding as of Jan. 1, 2008

depending on cow slaughter in 2007 and the number of heifers that calve in

2007," said Rosa.



Finally, analysts said cattle herd expansion attempts during 2004 and 2005

should be shown by the "steers 500 pounds and over category," of the report,

with the average of analysts' estimates predicting a 1.4% year-over-year

increase. Vaught and others said they think many of those steers now reside in

feedlots.



And, a decline in heifers held for beef cow replacement was also expected due

to last year's drought and the big jump in feed costs.





-By Jim Cote; Dow Jones Newswires



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