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Liquidation in the cattle industry continues

A livestock economist says the July Cattle Inventory report confirms the cattle industry remains in the liquidation phase.

University of Missouri’s Scott Brown tells Brownfield the latest report from the USDA has beef heifer replacements down.  “The USDA total is 97.6% of the year ago,” he says.  “So we don’t appear to be holding back heifers for replacements when we look at this survey data.”

He says the latest Cattle on Feed report, also released on Friday, indicates producers aren’t holding heifers back.  “The percentage of heifers on feed, it actually went back up this quarter,” he says. “We’re now sitting at 39.9% so we’re a good, almost 10 points above where we were when we grew the herd back in in 2015.”

Brown says the industry could remain in this cycle for another 18 to 24 months and doesn’t anticipate rebuilding anytime soon. “We are at record prices or in some cases nearing record prices and so I think it’s good to understand that that doesn’t mean record profitability,” he says. 

He says pasture and hay availability and any additional drought pressure could delay expansion even further.