Few were surprised that placements, marketings and inventory were all up in the monthly Cattle on Feed report released Friday. But the degree of increase will likely be viewed as bearish by some, especially relative to markets in late spring and early summer.
The Jan. 1 inventory is 5% ahead of the previous year at 11.5 million head.
December placements of 1.8 million head were 16% higher than the same time the previous year. Most of the trade expected an increase in the 12-13% range.
December marketings of 1.83 million head were 5% above 2009. That made for the second highest December marketings since the series began in 1996.
For those using placements as a partial indicator of the nation’s herd expansion plans, heifers and heifer calves on feed Jan. 1 are 5% higher than a year ago.
“Commercial cow slaughter maintained a high pace during all of 2010. Cow slaughter each quarter was the largest in well over a decade (fourth quarter of 2010 estimated), as was the annual total cow slaughter,” say analysts with the USDA Economic Research Service (ERS) in the monthly Livestock, Dairy and Poultry Outlook. “And this slaughter was based on the smallest Jan. 1, 2010 U.S. cow herd since 1951’s total cow inventory of 39.4 million, which means a relatively high culling rate, even after adjusting for imports of Canadian slaughter cows,” they add.
The high rates of cow slaughter were supported by high cow prices during most of the year. Despite the relatively high cow slaughter numbers, anecdotal comments suggest some heifer retention for cow herd building may have begun. The Jan. 1 Cattle Inventory Report will provide an indication of heifer retention and whether we are at or near a “bottom” in cow herd liquidation.
The Jan. 1 cattle inventory report is due out Jan. 28.
“A speculative thought is that some pre-baby boomers, and some early baby boomers past or nearing retirement age, may be getting out of the cow-calf business,” say the ERS analysts. “This does not necessarily mean the cows of those owners will all go to slaughter; they may simply change hands—consistent with the trend toward fewer cow herds.”
To read more, go to usda.mannlib.cornell.edu/.