SPRING HILL, Tenn. – The beef cow herd is growing smaller according to the July 1 USDA Cattle Inventory Report. U.S. cattle and calves totaled 95.9 million head, three percent below the 98.6 million head of July 1, 2022.

“I think the report confirmed what most people already thought in that heifer retention had not started and that the beef cow herd was going to be smaller,” said Andrew P. Griffith, University of Tennessee professor of agricultural and resource economics.

“It also gave us our first look at the annual calf crop, and the thought there was that it would be smaller due to fewer animals in the breeding herd,” he added.

“It is difficult to compare July with January because of the differences in the seasonal production cycle,” he said. “However, the first half of the year clearly saw a continuing decline in cattle inventory.”

The report said all U.S. cows and heifers that have calved totaled 38.8 million head, two percent below the 39.6 million head on July 1, 2022. Beef cows, at 29.4 million head, were down three percent from a year ago. But milk cows, at 9.4 million head, were unchanged from the previous year.

Moreover, all U.S. heifers 500 pounds and over totaled 15 million head, four percent below the 15.6 million head on July 1, 2022, the report said.

Beef replacement heifers, at 4.05 million head, were down 2 percent from a year ago, the report said. Milk replacement heifers, at 3.65 million head are down three percent from previous year. Other heifers, at 7.3 million head, were five percent below a year earlier.

Derrell Peel, Oklahoma State University livestock marketing specialist, said, “Not only did the report show continued cattle liquidation thus far in 2023, but there are also no clear indications that numbers will stabilize or grow anytime soon.

“The current inventory of beef replacement heifers is 4.05 million head, lower than the previous cyclical low of 4.2 million head in 2011 and 2012, and is the lowest in 50 years of available July 1 inventory data,” he said. “There is certainly no indication of heifer retention in this replacement heifer inventory

“Moreover, the inventory of heifers in feedlots from the July Cattle on Feed Report was unchanged from last year, which indicates that relatively large numbers of heifers continue to be fed for slaughter rather than retained for breeding,” he said. “Heifers currently represent 39.9 percent of total feedlot inventories, the highest proportion of heifers in feedlots since 2001.”

He said the sharp increase in feeder cattle prices this year represents a growing market incentive for the beef cattle industry to transition from liquidation to herd expansion, but it does not appear the industry is responding yet.

Griffith said, “The drought in 2022 persisted into early 2023, which means most heifers were moved off of pasture into feedlots because there were no good prospects of pasture moving into the spring. Drought continues to persist in many regions of the country, which means those regions cannot begin retaining females for breeding.

“On the other side, regions that have improved forage conditions and hay supplies will likely begin retaining heifers this fall as the spring calf crop is weaned,” he said. “Some of these numbers may or may not show up in the Jan. 1, 2024, inventory report, but they should show up in July 2024.”

He added, “Jan. 1, 2024, cattle inventory will likely show further declines in cattle inventory, but if the climatic conditions are favorable for forage production then producers will retain heifers, given the strong cattle prices.”

He said prices will remain strong for the remainder of the year, and should promote heifer retention and beef cow herd expansion.

“Expansion will not be evident as of Jan. 1 (2024), but it will become more evident by this time next year,” he said. “It will take a few years to expand the herd, which means strong prices through 2026 at this point.”

To view the full July 1 USDA Cattle Inventory Report, visit: https://www.nass.usda.gov