This may be a year simply characterized by the John Wayne quote, “All battles are fought by scared men who’d rather be someplace else.” Cattlemen wanting to be somewhere else? I think most would say, “You betcha,” as they hand you their worn-out muck boots, a list of calves to doctor, an operating note that has a lofty total underlined, circled and highlighted at the bottom of the page, and calves still left to sell for the year.
Today’s cattlemen are a tough bunch of tenacious souls who all know that working an 8 a.m.-to-5 p.m. job would be much easier given that this year has presented challenges unlike ever before.
Fall calf prices in 2018 didn’t send any ranchers speeding home from the scales to kiss their wives and dance happily on the kitchen floor because they finally made it big. Instead, ranchers collected their calf checks, paid off their operating notes and prayed that 2019 would bring another skiff of 2014 luck.
However, it would do nothing of the sort. Instead, 2019 will be remembered as a year with a hellacious winter, high death loss in calves, way too many days of feeding cows, the Holcomb, Kansas, packing plant fire that sent the market into utter chaos and fall calf prices that still neglected to send anyone home singing, kissing or dancing.
Despite what the market has been (or hasn’t been), there are some factors of today’s market that makes one wonder what 2020 (or the upcoming years) will be.
First, it’s easy to agree that demand — the sheer yearning for good, hearty, mouthwatering beef — has carried this fall’s market. For weeks, boxed beef prices have rallied, helping to keep cash cattle prices strong and a good incentive for packers to keep the processing belts turned up high.
But have you stopped to wonder how demand is being met? If packers are processing more cattle than they did at this time last year, where are those cattle being pulled from? Are they harvesting more steers? More heifers? Maybe more cull cows? And how will that potentially affect the upcoming 2020 market and years to come?
From the data provided by USDA on the Actual Slaughter Under Federal Inspection report, I was able to compare 2019 slaughter records to 2018 records. As of the first week of November 2019, there have been 29,000,496 cattle processed, which includes steers, heifers, dairy cows, other cows and bulls; there have been 14,378,668 steers processed and 8,563,277 heifers processed.
Those numbers don’t really mean anything until they are compared to 2018 figures. Year-to-date slaughter records show that, for the first week of November 2018, slaughter totaled 27,295,007 head with 14,090,572 steers and 7,619,968 heifers processed.
|Total Slaughter:||1,705,489.00||more cattle processed in 2019 … up 6%|
|Total Steers:||288,096.00||more steers processed in 2019 … up 2%|
|Total Heifers:||943,309.00||more heifers processed in 2019 … up 11%|
|Total Cows:||169,200||more cows processed in 2019 … up 3%|
Based on the Cattle Inventory report released in January and July of each year by USDA, the most recent numbers showed that cows and heifers that have calved totaled 41.7 million (slightly below the July 2018 figure of 41.8 million), and all heifers, 500 pounds and over, totaled 16.4 million (1% above the 16.3 million in July 2018). Since 2014, the U.S. beef cow herd has grown substantially — from around 30 million head to the recent 32.4 million head.
Grain News on AgFax
Given that there is still a little over a month left in 2019 — and if boxed beef prices continue to climb or even remain steady — 2019’s total slaughter figures will be outstanding. But as cattlemen begin to eye 2020 and ponder what the year will be, the effect of this year’s slaughter on the U.S. domestic cow herd shouldn’t be overlooked.
This year, 11% more heifers have been processed than last year, and there have been 3% more cows processed. So, not only are we processing the older cows that would typically fall out of the cow herd anyway, but we are also processing young females that could have potentially gone on to raise calves.
As you probably realize, this will have an effect on our nation’s cow herd: fewer cows, fewer calves produced, beef demand still strong and gaining popularity in foreign countries, all while the pork industry is in utter panic over the tumultuous effects of the African swine fever outbreak.
That’s only half of the circumstance! If you were to walk into your nearest sale barn today, I’d bet money that you’d find a wall somewhere in the building that’s covered with cow dispersals. Nebraska, Wyoming, Montana and parts of the Dakotas have had full dispersion sales nearly every week this fall. Cattlemen are tired, short of money and not interested in going through another winter like last year.
But aren’t all opportunities kind of like this year’s cattle market? They come in the least-opportunistic times, covered in work, toil and the constant worry of whether you made the right decision. My grandpa, a sheep-herder who’s getting long in the tooth but still has a love for first-calf heifers, always says, “You make your money the day you buy, not the day you sell.”
Though this year has wreaked havoc on many producers, there is opportunity in times like this. Young females are being processed, old cows are being processed and the heart of cow-calf country is cutting back. And, thankfully, demand has kept slaughter aggressive, and packers are still hungry for more. The West wasn’t won while eating salad or fake meat; shimmers of opportunity and prosperity may lay ahead.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com