USDA reports lowest cattle inventory in more than 50 years

One livestock analyst calls USDA’s semi-annual cattle inventory numbers not all that surprising, at least until you make some historical comparisons. University of Nebraska-Lincoln Extension Livestock Marketing Specialist Darrell Mark says the report shows the smallest inventory since 1959 and the smallest calf crop since 1950.

USDA reported the total cattle and calf inventory as of January 1, 2010 at 93.701 million head, down 1% from a year ago, with all cows and heifers that have calved at 40.456 million, a 1% decrease, including a 1% decline in beef cows and a 3% drop in milk cows.

All heifers 500 pounds and over came out at 19.666 million head, up modestly on the year, with beef cow replacement heifers at 5.436 million, down 2%, milk cow replacements up 2% at 4.516 million head and other heifers 1% above a year ago at 9.714 million.

Steers 500 pounds and over were down 2% at 16.440 million head, while bulls 500 pounds and over and calves under 500 pounds were basically unchanged at 2.190 million and 14.949 million head, respectively.

Slaughter cattle and calves for feed in all feedlots were 2% lower than last year at 13.642 million head and the 2009 calf crop totaled 35.819 million head, down 1% from 2008.

So what does that mean for the future?

According to Mark, “Undoubtedly, as we look at cattle on feed numbers coming into the next year, we’re going to continue struggle to keep feed yards at capacity. We’ve got a very tight calf crop, that seems to be pretty well confirmed here too, but the numbers in the report, compared to the trade expectations [were] maybe just a little higher than average.”

Mark adds “I think one of the things in the report that maybe is the most noteworthy – heifer retention for the milk cow herd. That points to maybe faster growth than what we might have expected following 2009 when we did see the multiple dairy cow buyouts by led by CWT.”

Mark calls the numbers neutral to bearish for CME cattle futures.

Darrell Mark discusses the significance of the numbers (7 minutes, 30 seconds MP3)