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
agriculture.com
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
agriculture.com