A dearth of beef substitute heifers

The common value of 500-pound steers in Oklahoma auctions in July was $283.68/cwt., up 48% over the worth of $191.48/cwt. one yr in the past. This represents a rise in worth of $461/head from $957/head to $1418/head over the identical time final yr. Increased calf costs are the market results of frequently smaller cow herds and declining feeder cattle provides.

USDA’s July “Cattle” report confirmed that cattle inventories are persevering with to lower in 2023. The whole stock of cattle and calves was 95.9 million head, down 6.7% from the current cyclical peak in 2018, and simply fractionally above the 2014 low. The July 1 beef cow herd was 29.4 million head, down 9.3% from the 2018 peak, and is 1.2% decrease than the 2014 low. The 2023 July beef cow herd is the bottom in the whole knowledge collection for this report courting again to 1973. Estimated provides of feeder cattle from this report are 34.4 million head, down 3.6% yr over yr. The 2023 calf crop is projected at 33.8 million head, down 1.9% yr over yr and down 2.5 million head from the 2018 peak. Feeder provides will proceed to shrink into 2024 at the least.

Quickly rising calf costs in 2023 haven’t but provoked any heifer retention and herd rebuilding. The meat substitute heifer stock was 4.05 million head, down 2.4% from final yr and is the bottom ever within the July “Cattle” report. Not solely are substitute heifer inventories low, however the provide of different heifers that might be used for breeding can also be low. It’s typical for some heifers not included in reported substitute heifer inventories to get bred and enter the cow herd. These heifers come out of the “different heifer” class in stock stories. The opposite heifer stock contains heifers already in feedlots in addition to heifers which can be a part of the estimated feeder provide. 

The July “Cattle” report confirmed a list of different heifers at 7.3 million head, down 5.2% yr over yr. The July 2023 stock of different heifers is 600,000 head greater than the bottom current different heifer stock in July of 6.7 million head in 2015. Nevertheless, the July “Cattle on Feed” report pegged the variety of heifers in feedlots at 4.47 million head, unchanged from final yr and 1.14 million head greater than the current 2015 low in heifers on feed. Which means that the residual provide of different heifers not already in feedlots (different heifers minus heifers on feed) is estimated at 2.8 million head, the bottom in accessible knowledge again to 1996.

Though the present value of 500-pound steers is simply 8% beneath the file Oklahoma value of $308.69/cwt in December 2014, increased costs are forward. The earlier file excessive calf costs occurred after heifer retention was nicely underway and feeder cattle provides have been squeezed to their tightest ranges. This course of might start in late 2023 however the tightest feeder provides won’t happen till 2024 on the earliest or presumably into 2025. 

With the pipeline of beef substitute heifers and residual different heifers extraordinarily low, heifer retention will probably start principally with heifer calves. The stock of calves below 500 kilos on July 1 was 26.3 million head, down 2.6% yr over yr. Assuming that producer curiosity in heifer retention kicks in, the method is prone to be gradual merely due to the restricted provide of heifers for the foreseeable future.  With apologies to Shakespeare…”My kingdom for a heifer.”