Cow and Heifer Slaughter Indicates Continued Herd Liquidation

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

 

The January 1, 2023 Cattle inventory report included a beef cow herd of 28.9 million head, down 3.6 percent year over year and the smallest beef cow total since 1962.  More importantly going forward, the report also included an inventory of beef replacement heifers of 5.16 million head, down 5.8 percent from the previous year. The replacement heifer total included the inventory of heifers expected to calve of 3.17 million, down 5.1 percent year over year. Both the replacement heifer total and heifers expected to calve were the lowest since 2011. 

 

The available supply of bred heifers (heifers expected to calve), combined with beef cow culling this year will determine the change in the beef cow inventory this year.  From the beginning of the year, the supply of bred heifers meant that beef cow slaughter in 2023 would have to decrease sharply…in excess of 18 percent year over year…in order to avoid additional herd liquidation this year.  Figure 1 shows that beef cow slaughter has been lower in 2023 compared to last year.  Cumulative beef cow slaughter reached a maximum year over year decrease of 13.8 percent in early September…a significant decrease, but not enough to prevent additional herd liquidation.  The July Cattle report confirmed that the beef cow herd was down by 2.6 percent from 2022 levels by mid-year. 

 

Figure 1. Beef Cow Slaughter

 

Since Labor Day, a very strong seasonal increase in beef cow slaughter has narrowed the gap from last year.  In the last ten weeks, beef cow slaughter has been down 7.0 percent year over year, leading to a mid-November year to date decrease of 12.1 percent.  This level of beef cow slaughter means that the January 1, 2024 beef cow inventory is likely to be down at least 2.5 percent from 2023.  

 

The January 2023 Cattle report also included the inventory of heifers available for breeding (calculated as the total replacement heifer inventory minus heifers expected to calve).  This category of replacement heifers was just under 2 million head, down 6.9 percent year over year and was the lowest in 23 years of available data.  Typically, some additional heifers (out of the Other Heifer inventory category) are also bred to produce the total supply of bred heifers going into the next year.  Heifer slaughter is also drawn from the inventory of Other Heifers. Heifer slaughter has decreased 2.5 percent thus far in 2023 but remains relatively large. Heifer slaughter was unchanged year over year in the first half of 2023 but has accelerated since July with a year over year decrease of nearly seven percent since Labor Day.  Nevertheless, it seems likely that the available supply of bred heifers will remain limited in 2024.  The beef cow herd will be smaller in 2024 and holding the inventory stable next year may be the most likely outcome.

 

 

Weaning Weight Versus Reproductive Efficiency 

Mark Z. Johnson, Oklahoma State University Extension Beef Cattle Breeding Specialist

 

Economic analysis of cow-calf operations shows a strong relationship between Profitability and both Percent Calf Crop Weaned per Exposed Female, and Pounds Weaned per Exposed Female.  This “economic analysis” discussion often leads to a debate of what has more value to the profit potential of a commercial cow-calf operation that sells calves at weaning. Is it reproductive efficiency in the form of a higher Percent Calf Crop Weaned? Or is it the Weaning Weight of the calves?  This week we take a look at the value of an extra 50 pounds of Weaning Weight versus an extra 5% Calf Crop Weaned per Exposed Female relative to current market values. We frame the debate as follows:

 

Herd A

200 cow operation

Average mature weight = 1,300 pounds

90% Calf Crop Weaned, resulting in 180 calves (90 steers and 90 heifers at an average of 525 pounds). Herd A is averaging 472.5 pounds of weaning weight Per Exposed Female.

 

Herd B

200 cow operation

Average Mature Weight = 1,300 pounds

85% Calf Crop Weaned, resulting in 170 calves (85 steers and 85 heifers at an average of 575 pounds). Herd B is averaging 488.8 pounds of weaning weight Per Exposed Female.

 

According to the November 17, 2023 USDA Oklahoma Weekly Cattle Auction Summary:

 

Herd A’s Calves

525 pound steer calves are worth $294/cwt, or approximately $1,544 per head.

525 pound heifer calves are worth $243/cwt, or approximately $1,276 per head.  

 

90 steers x $1,544 = $138,960 

90 heifers x $1,276 = $114,840

For a total gross value of $253,800

 

Herd B’s Calves

575 pound steer calves are worth $273/cwt, or approximately $1,570 per head.

575 pound heifer calves are worth $235/cwt, or approximately $1,351 per head.

 

85 steers x $1,570 = $133,450

85 heifers x $1,351 = $114,835

For a total gross value of $248,285

 

The Bottomline 

Under current market conditions, Herd A’s advantage of 5% more Calf Crop Weaned results in $5,515 in extra revenue over Herd B’s 50 pound advantage in actual Weaning Weight. Reproductive efficiency (in the form of a higher percent calf crop weaned) is a very economically important trait in a cow-calf operation. 

 

References:

Chapter 4, OSU Beef Cattle Manual, Eighth Edition, E-913         

           

USDA AMS Livestock, Poultry & Grain Market News. OK Dept. of Ag Market News

 

Dr. Mark Johnson, OSU Extension beef cattle breeding specialist, explains the importance of reproductive efficiency on SunUp TV’s Cow-Calf Corner from October 27, 2023. 

 

 

Using Genetic Testing to Make Profitable Marketing Decisions 

Jacee De Vries and Chris Johnson Graduate Research Assistants, Oklahoma State University Department of Animal and Food Sciences 

 

The goal of any cow/calf operation is to raise calves that generate the highest payout. Traditionally, cattle are evaluated based on physical traits that have worked for the producer in the past. With the help of genomic testing, producers can see each animal’s genetic potential as soon as it hits the ground. Genomic testing is especially useful for selecting calves for retained ownership through finishing. When selecting cattle to finish, knowing their potential for gain and quality can be very beneficial in maximizing profitability.  

 

Genomic tests are a tool that can be used to create strategic marketing plans by taking a small ear tissue sample to compare genome traits of a calf to others in their breed. Tests can range from $15-39, depending on the level of detail desired. These test results will provide producers with maternal, production, and carcass trait scores on a scale of 1-10. Some of the traits analyzed are milk yield, weaning weight, average daily gain (ADG), marbling score, ribeye area, and many more. Additionally, many testing companies compile performance and carcass scores into a terminal index. These indices identify calves with the highest potential for profit when sold on the grid. Values assigned to these economic traits along with maternal traits can give the producer a new perspective on their herd. 

 

Seedstock producers have made genomic testing a standard practice among breed associations. Commercial producers and cattle feeders are beginning to realize the potential for using genomic tests to gain insight on their cow herd, bulls they use, or management practices. By transitioning to genomics-based selection, the rate of genetic progress can be greatly improved. Marketing high-quality beef begins at the cow-calf level. If producers are choosing to retain ownership through the feedlot or finish cattle on the farm, genomic test results can be a very helpful indicator of expected performance. For example, producers can retain ownership of calves out of dams with high test scores for ADG, hot carcass weight, ribeye area, and marbling. If fed to their maximum potential, these cattle will weigh more at finishing and grade better at the plant. In addition to using genomic testing for management decisions, testing can also be very beneficial for marketing decisions. Many tests provide an optimum number of days on feed for each individual animal. This tells producers the exact day that the cost of feeding the cattle begins to outweigh any additional gains. Some tests also identify each animal’s risk for Bovine Congestive Heart Failure. This allows producers to select lower risk cattle or choose to manage higher risk cattle differently. 

 

According to the 2011 USDA-APHIS survey, over 50% of cattle in feedlots are being custom fed or jointly owned between the producer and feedlot. With the majority of producers having a role in finishing cattle, maximizing gains is more important than ever. Many commercial producers are leaving dollars on the table by shipping mixed loads of productive and unproductive calves to the feedlot. By taking advantage of the information provided by genomic testing, cattle owners can minimize risks and feed cattle to their maximum potential.