By Matthew McQuagge Analyst , CattleFax

The U . S . beef cow herd is poised for expansion after widespread drought , elevated input costs , and constrained profitability in the cow-calf sector have driven contraction since 2019 . The Jan . 1 , 2023 , USDA Cattle Inventory Report puts the beef cow inventory at 28.9 million head which is down 8.7 % from the 31.7 million head in 2019 ( Image 1 ).

Presently , these factors have lessened or reversed their effects . Weaned calf prices approached new highs this past month , trading $ 80 / cwt higher headed into the fall run compared to last year . This trend is expected to continue leading to projected annual averages for 550-lb steers more than $ 300 / cwt in the next few years . In response , many bred cows and bred heifers are seeing values more than $ 2,000 / head on the expectation that these prices will move significantly higher and surpass 2014-2015 levels . This year ' s elevated calf values are offsetting the increase in input costs leading to a profitable year for most cow-calf producers . Unfortunately , producers in regions still struggling with limited moisture continue to be faced with forage availability challenges . These lingering drought issues , coupled with the highest cull cow values since 2015 , continue to play a large role in the decision to keep or cull females . Year-to-date ( January-August ), beef cow slaughter is down 13.8 % from last year ’ s numbers coming in around the five-year average . Of note , cow slaughter has dropped below the five-year average in the Mountain West and Northwest regions indicating greater retention levels in those areas ( Image 2 ).

Year-to-date , the implied U . S . beef cow culling rate is at 11.3 %, below the record 13.7 % in 2022 . The yearly average for 2023 is forecasted to come in at 11.6 % with the expectation of 8.9 % for 2024 . For reference , a beef cow cull rate around 8.7 % indicates expansion . By comparison , in 2010 to 2012 , those three years were in the middle of a massive cow herd contraction and a drought cycle that was nearing its end with average culling rates between 11 % and 12.2 %. It ’ s important to note , in the last cycle , beef cow inventories didn ’ t start to increase noticeably until 2015 , four years after the peak culling rate in 2011 ( Image 3 ).

Beef Cow Slaughter Implied Cull Rate

Million Head

35.0 34.0 33.0 32.0 31.0 30.0 29.0 28.0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

Source : USDA CattleFax Projections

YEARS

12 %

10 %

8 %

6 %

4 %

2 %

0 % 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 F24 Years

Source : USDA CattleFax Projections

Continued on page 26 24 NATIONAL CATTLEMEN DIRECTIONS 2023