Replacement Heifer and Cattle on Feed Trends Affecting Markets

The US beef cow herd is down over 700,000 head from a year ago and heifers retained are just under 5 million head. According to recent USDA reports, Crossroads Co-Op Regional Manager Brian Irey, offers some explanation as to what is going on.

“Heifers retained were 4.930 million head that was revised lower from 5.164 million head that was reported earlier in the year. And what has happened there is feeder cattle prices have been so high that ranchers have opted to go ahead and either feed out that heifer or sell that heifer as a feeder, rather than foot a $2,000 a head replacement into their their herd. So by doing that, you've just pushed the shortage of feeder cattle out into the future and another year.”

Irey notes that the report showed that cattle on feed is up 1.6% from a year ago due mainly to dry weather late last summer, which pushed more cattle into feedlots earlier than normal.

“What's going to happen here is as we get into probably April forward definitely May June forward you're going to have a hole in a feeder cattle supplies and they're going to be very, very difficult to come by which is not a good situation for corn demand.”

Bryan Irey with Crossroads Co-Op.