HEIFER RETENTION WON ’ T OUTPACE COW SLAUGHTER
By Dave Weaber , Terrain Senior Animal Protein Analyst
Cow-calf producers have had every financial reason to sell a cull cow and reduce their cow herd . Despite a bit of a roller coaster for cow slaughter at the beginning of 2024 , the number of cows heading to town has started to decline from last year ’ s number .
Cull cow prices will continue to persuade many cow-calf producers to sell any cow sitting on the margins of performance , attitude or age . However , evidence shows there are only so many cows cow-calf producers can still liquidate and remain in the business .
Despite all that , the slaughter number is still not low enough for the U . S . cow number to start climbing come January 2025 . Slaughter ’ s Ride Down
Beef cow slaughter numbers have been on a bit of a roller coaster since the beginning of 2024 .
During January , weekly beef cow slaughter was down about 14,000 head per week versus a year earlier , likely because of severe winter storms that impeded trips to sale barns . This shortfall kicked off the substantial rally in the price of 90 % lean trimmings , a main driver of cull cow market prices .
In February , weekly beef cow slaughter totals rebounded . They were down only 2,000 head per week versus last year as ranchers and slaughter plants worked through the backlog of cows that should have gone to town in January .
By early March , supplies of beef cows for slaughter had tightened significantly despite the rallying cull cow prices that were fueled by record 90 % lean trimmings prices . ( The 90 % lean trimmings prices were 20 % to 25 % above year-earlier levels and nearly $ 1 per pound higher than at the start of the year .)
At the end of April , the industry slaughtered 13.5 % fewer cows versus a year earlier on a year-to-date basis . The trouble with this statistic , if the trend holds through the rest of the year , is beef cow slaughter still isn ’ t low enough to result in an increase in beef cow numbers on Jan . 1 , 2025 ( see Chart ). Breeding Herd Expansion Still on Hold
How can this be ? It boils down to the limited number of beef replacement heifers that were retained as calves in fall 2022 , bred this past summer , and are calving this spring .
I used the USDA ’ s number of beef replacement heifers expected to calve in 2024 that appeared in the January cattle inventory report as a maximum likely outcome , as I don ’ t expect all those heifers to make it into the Jan . 1 , 2025 , cow herd . ( Some will have calving difficulties and end up in the beef supply , for instance .)
This so-called best-case scenario means the beef cow herd will decline an additional 70,000 head from the Jan . 1 , 2024 , level . I expect a more normal percentage of beef replacement heifers entering the herd , not a full-fledged expansion pace , which suggests the cow herd could decline by 275,000 to 325,000 head ( -1.2 % year-over-year ) by year ’ s end .
Two key statistics further strengthen my outlook for the beef cow herd to continue tightening into 2026 :
1 . Heifers as a percentage of steer slaughter has exceeded 70 % for the past six weeks , and
2 . Heifers as a percentage of cattle on feed has remained above 39 % since the beginning of April .
Both points reflect continued heifer utilization in the beef supply chain , which means very few , if any , additional heifers will be bred this summer .
Additionally , rebounding feeder heifer prices during the past two months , combined with emerging La Niña-induced drought forecasts for the second half of 2024 and early 2025 , have ranchers rethinking their plans .
Some ranchers who planned to develop beef replacement heifers they bought this past fall and sell them as bred heifers the coming fall have opted to take their profits early and preserve 2024 forage resources for the cow herd . Therefore , I expect large heifer placements to continue well into the summer , which will limit supplies of heifers expected to calve in 2025 . Prepare for Fewer Calves Still
Stockers and feedyard operators need to plan for the next two years to be an environment with even fewer calves than there are today . Tight feeder cattle and calf supplies will be even tighter when heifer retention begins in earnest .
The planning process will require seeking alternatives to offset reduced head counts or higher replacement cattle costs or both . Margin operations will likely be looking at alternative classes of cattle , such as those in lighter weight categories or feeding heifers instead of steers , to stock operations .
Other alternatives for stocker operations may include purchasing fewer very light calves for use in a double stock program to utilize available grazing resources or extending ownership into another production phase .
Terrain is a team of economists who provide expert analysis to the customers of American AgCredit , Farm Credit Services of America and Frontier Farm Credit . Learn more at Terrainag . com .
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