With small inventory numbers, it’s time to try and revitalize the U.S. cattle herd. Cattlefax CEO Randy Blach said that, in the latest Cattle Inventory Report released by USDA, the July beef cow numbers are the smallest on record going back to around 1970.
“Beef cow slaughter is down about 700,000 head in 2023, but that is still a liquidation pace,” Blach said. “When you think about where we have gone and how much we have downsized, we have got to see beef cow slaughter drop further than that to actually get us back into expansion.”
As an industry, cow liquidation and heifer retention have not begun in large fashion yet, but it is coming. Blach said he could see producers retaining females from this current calf crop.
“You’ve got too much financial incentive now for producers,” Blach said. “With calf prices this much above the cost of production, we’ll start retaining. I think the rate of expansion will be interesting with interest rates where they are today, again, if you look at the cost of interest at the cow-calf level, at the stocker level, and at the feedlot level, you add all those together and that’s close to a $200 bill today. That’s what it takes to go all the way through the system. That by itself is going to be a limiting factor.”
With high input costs matched with high cattle prices, Blach added that risk management will become increasingly important.
