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JANUARY 1 1 million year-over-year. This The Midwest Cattleman · February 23, 2023 · P16
continued from page 3 was a decrease of 3.6%, and
prices resulted in an 11% that was after a downward year. While the weather will will be down considerably.
increase in beef cow slaugh- revision of about 0.5% to the undoubtedly play a factor In fact, 2023 will be the first
ter during 2022. This was January 1, 2022, estimate. here, cow numbers and heif- year-over-year decrease in
combined with a decrease in For perspective, this puts the er retention estimates sug- beef production since 2015.
heifer retention as more heif- size of the US cowherd below gest that calf crops will keep
ers entered the beef supply 2014 levels and the smallest getting smaller in the near
chain. USDA estimated the since 1962. term.
number of beef cows in the While beef cow invento- Cattle-on-feed num-
US to be down by more than ries tend to get the most at- bers also have import-
tention, several other ant implications for
numbers are particu- 2023. As more females
larly interesting. Heif- entered the beef supply
ers held for beef cow re- chain, on-feed inven-
placement were down tory ran above year-
6%, a larger decrease ago levels for much of
than seen in the Janu- 2022. That trend fi-
ary or July report from nally changed last fall
last year. This suggests and note the 4% reduc-
continued reductions in tion in the table. This
the size of the beef cow speaks to beef produc-
herd for the current tion in 2023, which

IMPLICATIONS OF USDA’S JAN. 1 INVENTORY REPORT
By John Nalivka
With the release of USDA’s know there were full time 1978. Honing
January 1 Cattle Inventory and / or part-time cattlemen in on the heif-
report, we now have an idea who liquidated herds over ers, the num-
of our 2023 starting point the past two years and at ber of heifers
regarding cattle numbers. the time, indicated they had weighing over
That 3% smaller inventory no intention of getting back 500 lbs., was
is an indication of how badly in the cow business. In ad- down 4% from a
drought and poor or negative dition, how many cattlemen year earlier and
returns impacted cow-calf reduced their herd and will the lowest since
operations. I believe I had take a very cautionary ap- 2014 and this
that issue pretty much put to proach to building numbers not hardly sur-
rest by December as my pro- back. In other words, it may prising since heifer slaughter the cow herd changes once
jections for this year’s inven- take more than two years of was up 5% over 2022 and the spring calving season is over
tory, based on cow and heifer higher calf and feeder cattle highest since 2004. Further, with the number of heifers
slaughter last year, were gen- prices to motivate herd ex- the number of heifers on feed that were actually bred and
erally in line with the USDA pansion. While one must be on January 1 was down 6% calved. Based on conditions
report. a bit careful with the data, from 2022 and the lowest in 2021 and 2022, I would be
While the focus is near- there are a couple of points since 2011. surprised to see that many
term cattle numbers (2023), worth noting that may pro- So, given the data, I be- heifers were retained and
the other issue is how quickly vide an indication of produc- lieve herd expansion will be bred in 2022. At this point,
producers will expand herds er intentions regarding herd a rather slow-go with many I still think the approach is
– if at all. This is import- numbers. cow-calf operations taking a cautious optimism with any
ant to the entire beef supply First, in reducing the in- wait and see approach about increased heifer retention
chain. Beef production is ventory 3% from a year ago expansion. The numbers on from this year’s calf crop
centered on cattle numbers and taking it to the low- feed at the beginning of this coupled with sharply lower
and industry production eco- est number of cattle since year coupled with the sharp- cow slaughter not leading to
nomics are a function of those 2014, the industry slaugh- ly lower replacement rate increased production until
cattle numbers as much as tered 37.3% of the January would support that conclu- 2026.
they are beef production – 1, 2022 inventory during sion – at least at this point. Drovers
cow-calf, feedlot, packer. We 2022 and the highest since We will see how the size of

WHAT THE CATTLE INVENTORY REPORT MEANS FOR CATTLE MARKETS IN COMING YEARS?
By Dr. Andrew Griffith, Department of Agricultural and Resource Economics, University of Tennessee

With the release of the plications are apparent. ited feed resources and the Feeder cattle prices will es-
January 1 cattle inventory The first observation is uncertainty of being able to calate quickly once heifer re-
report, there have been sev- that cattle prices are likely feed those animals through tention begins, but the mar-
eral questions concerning to increase and be strong for the remainder of the winter ket is still several months
what it means for cattle mar- at least three years. Howev- and early spring. With many away from this. Delayed heif-
kets the next several years. er, prices may not escalate as heifers still destined for the er retention this year should
If the inventory report is quickly as some may think, feedlot, it will likely be the result in strong feeder cattle
paired with record low hay because many heifers and second half of the year before prices in both 2024 and 2025.
stocks and high feed prices, cows will continue to enter any type of herd expansion
then some longer-term im- the slaughter mix due to lim- can begin.