STILLWATER, Okla. – There’s an interesting, yet often unknown history behind the USDA cattle inventory reports, according to two university agricultural economists.

“The cattle industry has a tendency to have approximately 10-year cycles of inventory that date back 150 years, with the July 1 USDA cattle inventory reports going all the way back to 1920,” Derrell Peel, Oklahoma State University extension livestock specialist, told Farm World.

“The last two cycles – low in 2014 and the current liquidation – have reflected cycles, but have been exaggerated by additional liquidation due to drought,” he said. “In the current cycle, heifer liquidation has been particularly aggressive, leading to record-low replacement heifer inventories.”

He said the current inventory of beef replacement heifers in the recently released July 1 USDA Cattle Inventory Report 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. 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 USDA said the cattle inventory surveys provide basic inventory data that describe the nation’s cattle herd.

The reports also provide estimates of the number of breeding animals for beef and milk production, as well as the number of heifers being held for breeding herd replacement.

“Estimates of cattle and calves being raised for meat production are also included,” the USDA said. “The number of calves born during the previous year is also measured.

“This survey is conducted in all states,” the USDA added. “A sample of cattle producers is selected from the NASS list frame. A sample of area tracts is selected to measure incompleteness of the list. This ensures statistical coverage of all cattle operations in each state.”

Andrew P. Griffith, University of Tennessee professor of agricultural and resource economics, told Farm World the purpose of the cattle inventory report – as with most USDA reports – is to provide transparency to all interested parties in an industry.

“In such, it supports price discovery within the industry because it provides the most comprehensive estimate of supply at different stages of production,” he said.

He said the cattle inventory reports that are issued only twice a year are more associated with the production cycle of cattle, compared to hogs, where the USDA conducts quarterly reports each year.

“A cow has a 285-day gestation, while a sow has a 114-day gestation,” he said. “Thus, a cow will have one calf per year. Alternatively, the sow herd averages over two litters per year, and the litter size can vary much more than the number of cattle. That is probably the main driver.

“It is not worth the cost to collect the cattle information more than twice per year,” he added. “There have been years in which the July report has been omitted due to lack of funding.”

Peel said the July report is largely viewed as a supplement to the January report, and provides a mid-year update on inventory changes the industry is frequently experiencing.

“The value of the July report has been questioned and the USDA did not provide the report in two years – 2013 and 2016 – in response to budget cutting efforts,” he said. “However, the loss of information was noticeable, and led to additional support for the report to ensure that it is provided regularly.”

He said the January cattle report provides inventory breakdown for all states, as well as national totals, while the July report provides a mid-year update on inventory changes in the cattle industry, and provides the first estimates of the current-year calf crop.

“I believe the July report started in response to industry requests for more frequent information on cyclical changes in cattle inventories,” he said.

Griffith said data of the Jan. 1 cattle inventory report dates back to 1920 for beef cows.

“The calf crop data that I am familiar with dates back to 1960,” he said. “Alternatively, the all-cattle and calves values that I am familiar with dates back to 1867.

“The July report goes back to the 1970s,” he said. “This survey is similar to most NASS surveys in that it is a cooperative effort between the USDA, state departments, and land grant universities.”

He agreed with Peel, saying one of the major factors of the July 1, 2023, inventory report of beef replacement heifers becoming the lowest in 50 years of available July 1 inventory data was continued drought.

“All of the spring-born calves in 2022 were sold as feeders because drought persisted through the end of 2022 for many regions of the country,” he said. “Similarly, the fall-born calves of 2022 were not retained in the spring at a rapid pace in these same regions because there was no guarantee of improved forage supplies or anticipated hay production.

“Hay supplies were extremely low and the last thing most producers were wanting to do was increase the need for hay this coming winter, knowing they had low reserves to begin with,” he added.

He said the high price of calves during the spring and summer has also resulted in producers selling heifers to capitalize on high prices.

“They simply did not want to take the risk of prices declining, so they took their money to the bank, while they knew prices were strong,” he said.