Feeder Cattle and Calf Supplies Decline Sharply

by Mike Miller, Cattle-Fax

U.S. feeder cattle and calf supplies outside of feedlots have continued to decline and on Jan. 1, 2004, are expected to be down more than 900,000, totaling a historically small 28.2 million head.  Mid-year feeder cattle and calf supplies were down 200,000 head from the previous year.  The reduction in feeder cattle and calf supplies from July through the end of 2003 has been primarily driven by increased placements of cattle into feedlots.  Since the mid-year cattle inventory report, feedlots have placed about 1 million more cattle than they did from July through October 2003.

 Imports of feeder cattle and calves have had little impact on the total supply during 2003. The decrease in year-to-date feeder cattle imports from Canada (down 307,000 head) since the border closure has been offset by an increase in imports of Mexican feeder cattle and calves of 333,000 head.  This trend is expected to continue into 2004 at least until the border with Canada reopens.

The number and percentage of heifers placed into feedlots surged during September and October.  This rapid increase in heifer placements resulted in 313,000 more heifers being placed into feedlots during these two months when compared to a year earlier.  Year-to-date, heifer placements are up  8 pecent or 575,000 head.  With more than half of this increase occurring during the past two months and an increase in heifer placements that weighed more than 700 pounds, some of these heifers were in all likelihood counted as beef replacement heifers for the July cattle inventory report.  But, due to high feeder cattle prices and continued drought conditions through much of the West, they were sold and ended up as feeder heifers. 

Bottom line:  The utilization rate of last year’s calf crop will be nearly record high during 2003.  This utilization rate can’t continue and will force feedyards to compete aggressively for the limited supply.  Herd expansion has not yet begun in earnest and heifers are not being diverted back into the cow herd. However, when this occurs feeder supplies will be depleted further.  Tighter available supplies are expected throughout 2004.