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balance with beef demand
DENVER, Colo. - U.S. cow
slaughter is continuing at a
rate which is putting the
basic cow herd back into
better balance with demand
for beef, the American
National Cattlemen’s Assn,
pointed out this week.
The nation’s cow herd
totaled 52.4 million head on
Jan. 1, 1977 - down four per
cent from a year earlier and
8 per cent from the peak in
1975, according to the
government’s latest cattle
inventory report. This
reduction in herd size
resulted primarily from a
record large cow slaughter
of 11.6 million head in 1975
and 10.6 million in 1976.
The numbers reduction
phase of the current cattle
cycle is expected to continue
(although at a slower rate)
in 1977, and the cow herd
may drop to about 51 million
head on Jan. 1, 1978, it was
noted by economists with
Cattle-Fax, the market
analysis arm of ANCA.
However, they said, if
severe drought conditions
continue in rmdwestern and
western pasture and range
country, there could be
further severe herd
liquidation, and the basic
Cow herd in better
cow herd could decline even
further this year.
At this time, Cattle-Fax is
expecting a nine million
head cow kill in 1977. In
January, the total was
920,000 head, down 18 per
cent from a year earlier. The
February total is estimated
at 800,000 head, down 5 per
cent from the same month in
1976. While less than the high
levels a year earlier, the 1977
monthly cow slaughter totals
so far still are relatively
large.
The comments on the cow
herd were part of a con
tinuing Cattle-Fax-ANCA
program to help keep the
industry posted on trends in
cow herd size, including
apparent relationships with
beef demand.
ANCA President Wray
Finney noted that there has
been a long-term upward
trend in U. S. cow numbers
as beef production has in
creased along with increases
in population and income.
However, the 10-year cattle
cycles have brought sharp
swings in herd size above
and below the upward trend
line.
“With the past two years’
large cow slaughter -
Lancaster Farming. Saturday, March 12,1977—35
resulting from drought in
some areas as well as ex
treme financial losses - the
cow herd has now returned
to the trend line,” Finney
said. “A further drop in cow
numbers is likely, though,
because of herd liquidations
and reductions brought on by
current adverse economics
and weather. In fact, the cow
herd could decline somewhat
in 1978 as well as 1977.
“The tendency for cow
numbers in each cycle is to
go lower than desirable from
the standpoint of stability
and then, as profits improve,
to go too high to sustain
profitability for more than a
few years.”
Although the cow herd is
now back at the trend line,
Finney said, it may be that,
in today’s economy, the cow
herd will have to decline at
least another one to two
million head before the total
industry can expect
favorable returns. If
production costs continue to
climb, if per capita dollar
demand for beef continues to
lag behind historic levels,
and if population growth
slows, a slower average rate
of growth in cow herd size
may be required in future
years.
One thing to keep in mind,
ANCA said, is that the beef
supply from a given size cow
herd does net reach the
market until one and a half
to two years after birth of the
offspring. Thus, the recent
reductions in cow herd size
will not be fully felt in the
market place until 1978 and
1979 - just as the large 1974
calf crop was not fully
reflected until 1976 (when
there were record large beef
supplies as a result of herd
liquidation as well as the
record large calf crop two
years earlier.)
Cattle-Fax said that, based
on current economics, an
nual per capita beef supplies
may have to drop to around
115 pounds or less before
industry returns will be
generally favorable
(although reduced feeder
cattle numbers could put
many producers back in a
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break-even or profit position
by late 1977 or early 1978).
Prospects now are that per
capita supplies will decrease
from 129 pounds (carcass
weight) in 1976 to about 121
pounds in 1977 and 116
pounds in 1978, with a further
decline in 1979 and perhaps
1980, before cyclical in
creases in per capita sup
plies resume.
Finney went on to point out
that, during past cycles, beef
production was increasing
not just because of larger
cow numbers but also
because of significantly
rising output per cow. The
increase per cow resulted
from (1) a shift from dairy to
beef cows; (2) an increase in
fed beef as a proportion of
the total; (3) decreased calf
slaughter and more feeding
out of calves; (4) improved
calving rate; (5) improved
technology and
management.
In the foreseeable future,
he said, these same gains in
beef output per cow are not
likely. Therefore, beef
production will depend mori
on cow herd size, and it will
be possible to monitor herd
size and longer range supply
trends more accurately.
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