Market News & Headlines >> The Ever-Shrinking Cow Herd
Despite a further estimated 3% drop in the nation’s cow herd during 2013, the ratio of number of cows going to slaughter compared with the Jan. 1 total cow inventory appears to have held up at the high levels seen in 2010, 2011 and 2012. This suggests the Cattle Inventory report Jan. 31 will show additional declines in the Jan. 1 cow inventory.
This spells continued strong prices for feeder cattle, especially with lower corn prices encouraging placements at lighter weights once winter weather extremes abate. USDA economists estimate recent feeding costs in the $130/cwt. area, meaning lots are in the black given the record prices packers are paying for live cattle. However, the record beef prices, combined with the expectation of increasing pork and poultry raise concerns about how record beef prices will play in the supermarket. Should a bigger shift toward cheaper meats unfold than expected, beef – and therefore cattle – prices could drop in a hurry (see Jan. 17 The Brock Report lead article.)