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THE CONTRIBUTION                   erated heifer placements into                           The Midwest Cattleman · March 10, 2022 · P14
      continued from page 3              feedlots or have producers
                                         been trying to capture short-
      pectations of supply shortages  term profits from stronger fed
      and higher beef prices has in- and feeder cattle prices? One
      creased beef demand. Higher  way to look at this is to exam-
      consumer demand is passed  ine the heifer placement rates
      down the beef complex through  by the severity of the drought
      prices. One impact of this de- that region experienced. Table
      mand shift has been atypically  1 shows the total percent of
      high prices for cull cows during  cattle on feed that are heifers
      the third and fourth quarters.  and the severity of drought by
      Seasonally this is when many  state (D3 + D4 drought status).
      cows  enter  the  market  from  There does not appear to be
      pregnancy checking and pro- any direct evidence to suggest                Figure 1. Percent of Total Cattle on Feed that are Heifers Nationally, 1996-2021.
      ducers choosing not to rebreed  that there have been large in-
      or retain open cows or heif- creases in the number of heif-
      ers through the winter.  With  ers placed in feedlots due to a
      high feed prices for most feeds,  worsening drought. The excep-
      helped of course by 2021 crop  tion to this would be Washing-
      production and drought, the  ton state which saw both wors-
      decision to take higher feed  ening drought conditions and
      prices was likely much easier  a significant increase in the
      than in previous years. All of  number of heifers placed on
      this is well known and docu- feed. All other states saw mod-
      mented by the industry.            erate increases in the percent
         The  number  of  heifers  re- of cattle on feed that were heif-
      tained  in beef cow herds,  and  ers (~ 2%) and varying drought
      thus their impact on herd con- conditions. This suggests that
      traction has been relatively  while the drought may have
      ignored. Each quarter, in addi- accelerated the timing of the            Figure 2. Percent of Total Cattle on Feed that are Heifers Nationally by Number of
      tion to their monthly cattle on  placements into feedlots, it                   Quarters Since the Beginning of a New Cattle Cycle, 1992-2021.
      feed report, USDA-NASS re- does not appear that it has af-            for local marketing strategies  (i.e., become more negative)
      leases the total number of cat- fected the proportion of heifers      as well as increased awareness  during both market growths
      tle, steers, and heifers on feed  entering feedlots.                  of basis patterns and hedging  and declines. Third, the effects
      for approximately 13 states.          So  what  do  the  combined     performance. Basis can widen                    continued on page 17
      This data suggests that heif- effect of accelerated beef cow
      er placements into feedlots, as  harvest and heifer feedlot
      a percentage of total cattle on  placements mean for herd li-
      feed, have been increasing (see  quation? First, it could mean
      Figure 1). Some of this is the  that current estimates of a
      natural cattle cycle occurring  1-2% reduction in the national
      (see Figure 2). During periods  beef cow herd would be a con-
      of contraction, heifer replace- servative estimate. Second, the
      ment is high and during peri- beef cow herd contraction is
      ods of herd rebuilding, it is low. not the same across the United
         But  has  the  drought  accel- States.  This has implications
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