WEST LAFAYETTE, Ind. — Recovering pastures and reduced feed
prices are likely to spark a slow trend of heifer retention for U.S. beef
producers, Purdue Extension agricultural economist Chris Hurt said.
Beef cattle numbers nationwide have been falling since 2007
because of drought that ransacked pastures and drove feed crop prices sky-high.
More favorable weather bringing more normal forage and grain production should
result in more producers keeping replacement heifers.
“Beef cow operations in some parts of the country where
pastures have been restored are probably getting ready to retain heifers,” Hurt
said. “Beef cow numbers have declined in the Southeast by about 700,000 head, or
12 percent, since 2007. Midwest numbers have dropped by 680,000 head, or 14
percent, since 2007. Both of these areas should have the pasture and the feed to
begin heifer retention.
“The northern Plains is another area that is ripe for herd
Currently, the U.S. Department of Agriculture has rated 72
percent of the nation’s pastures as fair, good or excellent, compared with just
46 percent in 2012.
Prices for feedstuffs such as corn and soybean meal are
expected to fall when new-crop harvest begins in the fall. Corn prices could
fall by $1.50 per bushel, and fall soybean meal prices could be as low as $150
per ton lower than current old-crop prices, Hurt said.
But parts of the country haven’t yet had enough pasture
recovery for producers to consider growing their herds. Such areas include the
central and southern Plains and the western U.S., which have about 43 percent of
the nation’s beef cows.
“Initial retention of heifers likely will occur this fall in
areas primarily east of the Mississippi River, plus the Delta, the western Corn
Belt and the northern Great Plains,” Hurt said. “This is a large area that
currently has 57 percent of the nation’s beef cows.”
Lower feed prices on their own might not be enough to
encourage major herd expansion, though. According to Hurt, it will take higher
calf prices, as well.
Current calf prices are up slightly since June, but likely
not enough to stimulate major expansion. So while heifer retention and expansion
plans will begin this year, national beef production will drop by about 4
percent in the last half of 2013 and 5 percent in the first half of 2014,
according to the USDA.
The drop should lead to higher finished cattle prices, which
would lead to higher calf prices.
“The industry might see the start of heifer retention this
fall, but the magnitude of expansion is expected to be low and slow to get
underway,” Hurt said. “Beef cow producers know that herd expansion is a
long-term investment, and they generally want a more extended period of
favorable returns before making major financial commitments.”