Released: October 13, 2006

Fourth Quarter Cattle Data Key to Herd Expansion Picture

MANHATTAN, Kan. – At the start of 2006, cow-calf producers were poised to expand their herds in response to profitable prices the last several years, but a recent increase in cow slaughter has clouded the picture, a Kansas State University agricultural economist said.

Beef cow slaughter so far this year (through late September) has been about 17 percent larger than during 2005, said James Mintert, agricultural economics state leader with K-State Research and Extension. And this year’s beef and dairy cow slaughter combined total has been 10.5 percent larger than a year ago.

“But totals for the year tend to mask what’s really been taking place,” said Mintert, who added that drought and poor pasture conditions sparked aggressive culling in beef herds last summer. As a result, 31 percent more beef cows went to slaughter in the July-September period this year than during a comparable period last year.

“The big rise in beef cow slaughter has stimulated speculation that the U.S. has shifted from herd expansion to herd liquidation,” he said, “but is that really the case?”

Federally-inspected cattle slaughter during the first nine months of 2006 was 4.1 percent larger than last year. At the same time, steer slaughter rose 5.1 percent, but heifer slaughter declined 0.4 percent, both compared with last year.

“The fact that heifer slaughter has been running so far behind steer slaughter suggests that, in some cases, producers have been aggressively culling cows while holding back more heifers,” Mintert said.

In years past, the ratio of total female (cow plus heifer) slaughter to steer slaughter has been a good indicator of whether producers were expanding or shrinking the U.S. cattle herd. When the ratio of female to steer slaughter dropped below 1.0, U.S. producers were generally expanding their herds, he said. Conversely, when producers slaughter more females than steers (ratio greater than 1.0), producers were liquidating.

“So far this year, the ratio of female to steer slaughter is 0.833, suggesting that producers are still trying to expand their herds despite drought and poor pasture conditions,” he said.

Mintert said, however, that it seems doubtful that producers will be able to ultimately expand the size of the U.S. beef cattle herd this year, given the big increase in cow slaughter.

“Fourth quarter cow and heifer slaughter will ultimately determine what happens,” he said. “But the slaughter data from the first nine months of 2006 does indicate that U.S. producers have not shifted into liquidation mode this year.”

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K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.

Story by:
Mary Lou Peter-Blecha,
mlpeter@oznet.ksu.edu
K-State Research& Extension News