Page 6 - MWC 09-9-2021s
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Drought and Herd Liquidation                                                            The Midwest Cattleman · September 9, 2021 · P6

       By Derrell Peel - Oklahoma State University
         Probably the most fre-             The average culling rate  heifers were 18.7% of the cow
      quently asked question I am  the past two years, since the  herd, a level that would sup-
      getting relates to how much  cyclical peak in 2019, has  port stable herd inventories.
      the drought is adding to herd  been  10.25%.  Over  the  past           The total number of beef
      liquidation in 2021.   It’s a  35 years, across cycles of ex- replacement heifers (which
      difficult question for several  pansion and liquidation, the  includes heifer calves and
      reasons. In the first place, we  average herd culling rate has  coming first calf heifers) and
      don’t know what the indus- been 9.65%  annually.   How- the subset of heifers calving
      try would have done in the  ever, because the drought  in 2021 were both fractionally                   ment heifers.
      absence of drought this year.   started so early in the year  higher year-over-year in the                 Finally, there is the ques-
      Having decreased the past  (carried over from last year),  January numbers.  No doubt                   tion of how producers not in
      two years from the 2019 peak,  it is likely that beef cow  producers  in  drought  areas                drought areas have respond-
      would the industry have con- slaughter was shifted earlier  have had to adjust replace-                 ed in 2021.  Forage conditions
      tinued liquidation in 2021 in  in the year.  Producers likely  ment heifer numbers along                have been good in some re-
      any event?    The turbulence  have already culled cows that  with cows.                                 gions, and it is not clear if pro-
      from the pandemic and other  would have been culled later               Some heifer calves that         ducers may  be holding more
      black swan events makes this  in the year anyway.  I doubt  were indicated as replace-                  cows and heifers to offset some
      an  even more difficult  ques- that the 8.7%  year-over-year  ments in January likely were              of the drought region impacts.
      tion.                              beef cow slaughter rate will  shifted into feedlots.   It is         In short, we don’t know what
         What  we  do  know  is  that  persist for the remainder of  not clear how many.   Heifer             would have happened in the
      beef  cow slaughter is  up  the year.   Nevertheless, the  slaughter is up 1.4% year-to-                absence of the drought and
      8.7%  year-over-year through  drought continues unabated  date over last year but year-                 we don’t know for sure how
      mid-August. If we assume  and cow slaughter rates will  over-year comparisons are                       the remainder of the year will
      current level of year-over-year  likely remain strong.                difficult because of pandemic     finish.  After playing with lots
      increase continues for the re-        Cow slaughter is only part  impacts last year.   Coming           of numbers and assumptions,
      mainder of the year, it implies  of  the  story  about  herd  liq- first calf  heifers in January       my best guess at this point is
      an annual beef cow slaughter  uidation.   It is less clear at  may have been  sold out of               that the drought has added
      of 3.55 million head.    That  this point in the year what is  drought areas and moved to               one-half to one percent of ad-
      would be a net culling rate of  happening with heifer reten- other parts of the country.  The           ditional beef herd liquidation
      11.4%, the highest beef herd  tion.  The January Cattle re- July  Cattle  report showed  a              this year.
      culling rate since 2011.           port showed beef replacement  2.3% decrease in beef replace-

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