It’s no secret that cattle supplies continue to dwindle with no end in sight – July’s beef-cow numbers and heifers retained for replacement were both down 2%. But midyear baseline projections from the Food and Agricultural Policy Institute (FAPRI) at the University of Missouri forecasts another 800,000 or so beef cows will be liquidated or not replaced by Jan. 1, 2013 (see table below).
Currently, this summer’s cattle-placement patterns suggest this year’s calf supply was pulled forward during the summer months.
“With almost a million fewer feeder cattle outside feedlots on July 1, 2010 compared with 2009, cattle appear to be placed on feed earlier than would be considered typical to take advantage of the current profit potential and to utilize feedlot pen space,” say analysts with USDA’s Economic Research Service (ERS) in the most recent “Livestock, Dairy and Poultry Outlook.”
“Continued increases in grain prices could counteract the pulling forward of feeder cattle placements, which could be supportive for feeder and later fed cattle prices,” they said.
“Mexico has been rebuilding its cowherd after a series of extremely dry years. As a result, Mexico should be in a good position to export feeder cattle to the U.S. This will offset anticipated reductions in exports of feeder cattle from Canada where large numbers of cows going to slaughter will reduce this and next year’s calf crops, and thus, future feeder-calf supplies.”
According to July 1 statistics, the Canadian cattle herd decline 4.9% to 14.0 million head. Beef cow number declined 5.1%.
Click to view table.