US Beef Herd
Ted McCollum III, PhD, PAS-ACAN
Extension Beef Cattle Specialist
Texas AgriLife Extension
Amarillo
BEEF PRODUCTION
vs. BEEF COW INVENTORY
Inventory on January 1, U.S.
Mil. Head
37
Bil. Pounds
28
36
35
34
33
32
31
27
Commercial Beef Production
26
25
24
Beef Cow Inventory
30
29
23
2015-2017 Forecast
28
22
1987
1990
1993
1996
1999
Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC and Derrell Peel
2002
2005
2008
2011
2014
2017
JANUARY 1 BEEF COW INVENTORY
U.S., Annual
Mil. Head
40
38
36
34
32
30
Analysis by Derrell Peel
Data Source: USDA-NASS
20
20
18
20
16
20
14
20
12
20
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
19
82
28
US BEEF HERD
• Expansion mode appears in play
How high will it go and how fast?
• Prices???
Fewer calves on market with heifer retention
How fast will numbers increase?
Commodities have softened
Calf demand
Will adjustments top bleeding in the
feeding sector???
Beef Demand ????
Exports and US $
Will oil bust be positive or negative?
Managing Winter Forage Resources
for Cow/Calf Operations
Ted McCollum III, PhD, PAS-ACAN
Extension Beef Cattle Specialist
Texas AgriLife Extension
Amarillo
Managing Winter Forage Resources
• Warm-season forages
Welcome relief this growing season
BUT, the above average rainfall and the timing ….
Stockpiled forages will have average to below
average forage nutritional value
heading into fall/winter
• Both crude protein and TDN
BUT, protein is first non-mineral nutrient of concern
drives forage digestion and intake,
Hence, energy availability and intake
Managing Winter Forage Resources
• Warm-season forages
Welcome relief this growing season
BUT, the above average rainfall and the timing ….
Stockpiled forages will have average to below
average forage nutritional value
heading into fall/winter
• Both crude protein and TDN
BUT, protein is first non-mineral nutrient of concern
drives forage digestion and intake,
Hence, energy availability and intake
Limit Grazing Cows
Provide supplemental nutrition
Fulltime grazing is excessive nutrient intake
Part-time access to high quality grazing
Layout to ease movement
Only need 1-2 full day/week on pasture
Remainder grazing on dormant pasture or consuming
harvested forage
• Less frequent grazing, more time spent graizng when
offf
•
•
•
•
•
•
Pregnant/Lactating Replacement heifers
• Provide supplemental nutrition
• Geatest benefit during early lactation, keep from
sliding
• Fulltime grazing is excessive nutrient intake
• Part-time access to high quality grazing
• Layout to ease movement
• Only need 1-2 full day/week on pasture
• Remainder grazing on dormant pasture or consuming
harvested forage
• Less frequent grazing, more time spent graizng when
off
Creep Grazing Small Grains
Provide supplemental nutrition to nursing calves
Calves need to be older than 3 mo to greatly benefit
Fall calving is the primary application
“Spring” calves born in Feb-Mar might benefit on a
graze-out schedule
• Calves graze separate from cows
• Access adjacent pastures
• Fulltime access with cows having part-time access
•
•
•
•
Mineral nutrition
Bloat prevention
What are cows worth?
What are values?
Other thoughts on building a herd
Ted McCollum III, PhD, PAS-ACAN
Extension Beef Cattle Specialist
Texas A&M AgriLife Extension
Amarillo
Nationally – How much will we “rebuild”?
Locally – How much will we “restock”?
AND, How Fast?
What is a beef female worth?
• Worth –
the value of something measured by its
qualities or by the esteem in which it is held
• SO, a cow/heifer can be worth different
amounts depending on who is valuing her
CURRENT MARKET
Texas Weekly Summary
Week Ending July 26, 2014
http://www.ams.usda.gov/mnreports/lswtxrecap.pdf
Bred cows $1500-2300/hd
Pairs $2100-3060/pr
Are they overvalued, undervalued, just right?
Estimating value – Net Present Value
• NPV – value today based upon discounted
future returns from production
• Need to know (GUESS??)
productive life of female (# of calves weaned)
estimated weaning weights
weaning %
cow salvage value (2-8 yrs from now)
calf prices (1-8 yrs from now)
discount rate
NPVs on 5 scenarios
• Weaning rates
Heifers – 92 % weaned 1st, 82% second, 84%
remainder
Cows – 95% first, 84% remainder
• Wean wts – 524 str
509 hfr
• Cow wt – 1150
• Discount rate – 5%
Prices used based on current “average” price of 255/cwt for
the 5cwt str and projected based on FAPRI trends
Price ProjectionsFAPRI & USDA
270
260
250
240
230
220
210
200
190
180
170
160
150
140
130
120
110
100
Projection’s are for 600-650 OKC Feeder Steers
2014
2015
2016
2017
FAPRI
SB
2018
2019
500-550 95%
2020
2021
500-550
2022
2023
NPVs on 5 scenarios
•
•
•
•
•
Retain weaned heifer calf and develop
Buy bred heifer
Buy bred cow with 3 calving opportunities
Buy bred cow with 5 calving opportunities
Buy a bred cow with a calf at side, calve 3
more times
NPVs on 5 scenarios
Retain/buy weaned heifer calf, develop, 8 calves
Buy bred heifer 8 calves
Buy bred cow with 3 calving opportunities
Buy bred cow with 5 calving opportunities
Buy a bred cow with a calf at side,
calve 3 more times
100%
$1920
$2930
$2500
$2760
$3040
So are current markets out of order?
NPV, $/hd
95% 90%
1625 1340
2580 2240
2310 2110
2480 2220
2790 2560
Are current markets out of order?
• Not if the price projections and production
parameters prove out
• BUT, what if?
• ARE THERE RISKS TO CONTEMPLATE?
Risks to Contemplate
• Market Risk
Can we stay at these price levels for the yrs
required to recoup the NPV promised?
Consumer demand
feed commodity prices declining
more help for the competitors
Ground beef is driving the price levels –
will demand hold?
will an alternate supply arise?
BEEF PRODUCTION - SJ_LS711
7/26/2014 7/27/2013
Cow & Bull Slaughter 107,816
128,382 (-16.0%)
Year to Date Totals
3,464,497 3,951,567 (-12.3%)
Beef primal and grind wholesale prices
Unit
Current
Week Ago
Year Ago
Rib
Choice
352.31
353.05
-0.2%
288.15
22.3%
Round
Choice
262.37
255.25
2.8%
158.76
65.3%
Chuck
Choice
226.87
228.10
-0.5%
157.48
44.1%
Trimmings,
Fresh
50%
149.86
137.05
9.3%
109.76
36.5%
Trimmings,
Fresh
90%
293.82
291.99
0.6%
199.88
47.0%
Live
Steer
16.41
16.23
1.1%
14.14
16.1%
Hide/Offal
Risks to Contemplate
• Market Risk
How fast and to what degree will …….
US producers expand numbers?
Mexican producers recover?
Imported beef fill the gap?
Pork and poultry fill the gap?
Risks to Contemplate
• Production Risk
Are your production costs higher or lower
than those in the example?
Are your preg rates and weaning rates?
At these levels, managing health, nutrition,
reproduction are more imperative and
more rewarding
Climate risk
(1) Is the current drought over?
(2) How variable will annual conditions be in
the next 5-10 yr horizon?
Risks to Contemplate
• Production Risk
Climate risk –
What does the future hold?
How does this influence my decision to
invest in cows?
(1) Is the current drought over?
(2) How variable will annual conditions be in
the next 5-10 yr horizon?
Building my numbers back
• Current cow markets not out of line with
future projections
• How good are projections?
• What are risks – market and production- and
how do they influence decisions?
Building my numbers back
• Are cows the sole means of restocking?
Better to have cows and some liquid cattle
• Are high priced cows the way to restock?
There are cows that are not as pretty, not
black, not as young, etc., that can be
purchased at a lower price,
AND given the markets in front of us, can be
as good an investment at perhaps lower
risk than other cows
Production Risk
• Long term climate (12 mo to 10 yrs from now)
Long term sea surface temperature cycles (3050 yr duration)
maintain higher likelihood of drier and
warmer conditions over next 5-10 yrs(???)