By Andi Anderson
The U.S. cattle industry is in a holding pattern as producers and analysts closely monitor conditions for signs of herd expansion. After hitting historically low inventory levels, the beef cattle industry is waiting for the right moment to rebuild.
Current numbers have dropped to lows not seen in over 60 years, raising questions about when expansion will begin.
According to Rob Ziegler, a University of Wyoming Extension specialist, several factors are influencing the delayed expansion of the U.S. beef cow herd.
“The U.S. beef cow herd inventory has received significant attention recently due to historically low levels driven by market prices and drought conditions that have incentivized producers to sell,” Ziegler explained.
Droughts have severely impacted the cattle industry during key periods, including 2011-2014 and 2021-2023, coinciding with contraction phases in the cow cycle.
Ziegler highlighted that examining cow slaughter numbers during these periods could provide insight into current producer intentions and the future market trajectory.
During the last cycle, beef cow slaughter peaked midway through the contraction phase, with expansion following a few years later. In 2011, beef cow slaughter reached 3.9 million head before dropping to 2.2 million in 2015 when expansion started.
In the current cycle, 2022 marked the slaughter peak with nearly 4 million head. Since then, cow slaughter declined by 12% in 2023, and projections suggest 2024 will see even lower numbers.
“If history repeats itself, as it did in 2011, we may have another one to two years of contraction before moving into the expansion phase,” Ziegler noted.
However, despite strong feeder prices, elevated interest rates and higher input costs in recent years have negatively impacted income per cow.
This raises concerns about whether current margins will be sufficient to encourage herd expansion within that timeframe.
While market conditions are showing signs of improvement, producers remain cautious, awaiting clearer signals that an expansion phase is on the horizon. The cattle industry continues to adapt, navigating economic challenges as it prepares for the next cycle of growth.
Photo Credit: gettyimages-sstajic
Categories: Iowa, Livestock, Beef Cattle