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The Midwest Cattleman · March 10, 2022 · P6
Cattle Cycle Scenario 2: Drought Abates

By Derrell S. Peel, OSU Extension Livestock Marketing Specialist

A previous article (Feb. 24) have producers interested percent. An even lower cull- cows. Achieving herd expan-
considered what continued in slowing liquidation, hold- ing rate might be possible… sion is likely not feasible and
drought might force the in- ing cattle numbers steady or the average culling rate in even holding the herd to zero
dustry to do in terms of addi- even expanding. However, the last herd expansion from change stretches the num-
tional herd liquidation. An- the extent to which higher 2014-2018 was 8.7 percent… bers to unlikely levels. If the
other scenario is that drought prices leads to expectations of but it doesn’t seem likely that industry does try to minimize
across the country subsides higher profitability (and a de- expansion signals are that herd liquidation in 2022 and
and is not a significant fac- sire to expand the herd) will strong yet. prepare for later herd expan-
tor in 2022. The question be tempered by higher feed The other component of sion, the reduction in cow and
then becomes what will the and other input costs. herd expansion is heifer re- heifer slaughter could result
industry try to do and to For producers affected by tention. The drought impacts in a larger decrease in beef
what extent will it be able to drought in 2021, the first step from 2021 determine what is production this year than is
do that? The cyclical peak in will be herd rebuilding. The possible in 2022. The number currently forecast.
the beef cow herd inventory overall beef cow culling rate of beef replacement heifers The most likely scenario is
was in 2019 and the indus- in 2021 was 11.55 percent, on January 1 was down 3.3 probably somewhere in-be-
try has been in liquidation the highest since 2011. In percent year over year with tween the severe drought and
for three years, significant- drought areas, producers who the subset of those that are no drought scenarios, with
ly enhanced by drought in culled heavily last year may expected to calve this year some drought continuing in
2021 and to a minor extent be able to sharply reduce cull- down 2.8 percent from last some regions. The result could
in 2020. If drought is not a ing this year if forage condi- year. The reduced inventory be modest levels of addition-
limitation in 2022, will cat- tions improve. In other areas of replacement heifers sig- al beef cow herd liquidation
tle producers continue herd producers may hold cow cull- nificantly limits possible herd in 2022, perhaps less severe
liquidation? The answer will ing to a minimum. After in- changes in 2022. It appears than 2021 but still significant
be determined by what cattle creasing sharply in 2021, beef to me that the most aggres- continued reduction in the
producers want to do and can cow slaughter could drop by sive 2022 scenario is for the beef cow inventory. It is likely
do relative to cow culling and as much as 10-15 percent year industry to hold the beef cow that cattle numbers will con-
heifer retention. Higher cat- over year in 2022. This would herd to a low level of liqui- tinue to tighten in 2022.
tle prices and expectations of result in a beef cow culling dation…perhaps a 0.5 per-
continued higher prices may rate between 10 and 10.5 cent or less reduction in beef

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