USDA cattle data neutral
The government's cattle inventory data released Friday were viewed as generally neutral for 2013 futures prices on Monday but somewhat supportive for the distant-traded 2014 contracts.
Most of the categories' figures were near analysts' expectations but a few pressed the edges of the ranges.
The U.S. cattle herd as of Jan. 1 was down 1.6% from a year ago, and the smallest since 1952, according to government data Friday afternoon.
The latest U.S. Department of Agriculture cattle-inventory report showed the nation's herd at about 89.3 million head, compared with nearly 90.8 million a year ago. In a Dow Jones Newswires survey, analysts had estimated on average a 1.8% decline from the previous year.
States showing the biggest year-on-year percentage declines in total cattle numbers included Oklahoma, with 7% fewer, Indiana and Missouri, both down 6%, Texas, Colorado and Wyoming at down 5%, and Kansas along with several others down 4%. These states were among those that suffered severe drought conditions in at least one of the past two years.
The total cattle herd as of the Jan. 1 date declined for the fifth consecutive year following the most recent peak hit in 2007 at nearly 96.6 million head. Since that time, the herd has been reduced by 7.6%. Meanwhile, corn prices during the same five-year period increased by about $3 a bushel, or nearly 75%.
The nation's calf figure in 2012 was reported at 34.3 million head, down 3.0% from 2011 and below the average of analysts' estimates.
The number of beef cows and heifers, or adult and young females, respectively, of breeds used mainly to produce beef, having given birth to calves in 2012 was reported at 29.3 million, down 2.1% from a year ago. Analysts had pegged the figure at down 1.5%.
The analysts also predicted, on average, a 0.4% decline from a year ago in the number of young female cattle intended to be added to the beef breeding herd. USDA reported a figure of 1.9% above the previous year, however.
Analysts' predictions for fewer beef cows were based on the impacts of back-to-back years of severe drought in key cattle-producing states and record-high grain and hay prices. In addition, hay production in 2012 was the lowest on record for data going back to 1974, while year-ending hay stocks nationally were also at a record low, according to Derrell Peel, extension livestock marketing specialist at Oklahoma State University.
The smaller-than-expected beef cow number suggests that more of the older cows were culled last year, said Rich Nelson, chief strategist with Allendale Inc. in McHenry, Ill. That may have opened up some space for a few more heifers to be held back with the intention of replacing the culled cows, but if weather conditions do not improve, some of those heifers may be sent on to feedyards instead. It's possible that the feedyards did not want more cattle due to the heavy losses they took throughout the fall, which may have inflated the beef cow-replacement figure at the end of the year, Mr. Nelson said.