Daily Livestock Report

Vol. 8, No. 150, August 4, 2010


Thank you to all DLR readers who dropped an e-mail
to share their take on the level of beef cow slaughter this year
and what may be driving it. This is obviously an important issue
to many people — and it popped up last week during the National
Cattleman’s Beef Association (NCBA) summer conference in Denver.
The agenda included a panel discussion about the shrinking
U.S. beef cow herd and what could be done to stop the decline.
NCBA Chief Economist Greg Doud noted during the discussion that
the U.S. beef cow herd has declined in 12 of the past 14 years. The
only two annual increases were observed in 2005 and 2006. Not
coincidentally, those increases followed RECORD-HIGH cow-calf
profits of nearly $150/cow in 2004 and 2005. We believe there is
causation— not just correlation — in that “expansion follows profits”
relationship.
We do appreciate the fact that none of the responses to
last week’s edition began with some version of “Dear idiot . . “ The
e-mails were drenched in true concern about what is happening this
year to the beef cow herd. Most agreed with Dr. Plain’s idea that
the economy and tight dollars — or the need to generate dollars
from anywhere, even if that means selling the small cow herd — are
a key factor in this year’s cow movement. But several other factors
were also identified:
 Producer age — and especially the age of some of those smaller
herd operators—was a common theme. It was also a point
of emphasis at the NCBA panel discussion. We concur with
that idea, of course, but would point out that average operator
age has been progressing for a long, long time. Has it just
recently hit a critical level? We doubt that. A more plausible
age-related situation would be that the combination of age and
cash needs is MUCH greater than either factor alone. We
could not find any Census data on age of beef cow operators
— but we agree that this is a major factor.
 Loss of acres to crops. Several responses pointed to examples
of pasture land that has been or is being broke out for cash
grain production. The recent persistence of $3-plus corn, $9-
plus beans and $5-plus wheat has certainly created big incentives
to put more acres to the plow and this loss of pasture will
have a negative impact in some areas. One comment said “I
remember how many pasture acres were lost in the 1970s for
the same reason” — ie. conversion to crops. These paradigm
shifts have VERY LONG TAILS!
 Some pressure is being exerted on cows on public lands as well. While we believe that most of these cows are in larger operations,
increasing pressure to reduce stocking levels will definitely contribute to higher beef cow slaughter in the short run.
 An aging cow herd that has “hit the wall.” This comment was based on many producers getting far more calves from a cow than they
once did. The extension of the cows’ productive lives from around 10 years to 15-17 years is great until a large chunk of the cows hit
the upper limit. This respondent and others look for some higher heifer retention later this year and into 2011.
Our favorite response, though, was this: “Cows are my golf so my grandson and I rebuilt the corral last summer and are working on fences
this summer between soccer games. We’ll take 1/2 day of vacation tomorrow to see [him] play in the under-14 state championship