Analysts expect the USDA’s imminent cattle inventory report to confirm that the herd in the cow-calf sector is still moving lower. Forecasts for the beef and dairy cow herd size – counted on January 1, 2023 -- vary but range from 2.5 percent to 3.3 percent lower, says the publication. These declines would make the herd anywhere from 89.624 million head to 88.845 million head.
The smaller herd size will have some major implications for the market, say the writers at CBW. First, the price of feeder cattle and calves will increase, meaning feedlots and beef processing plants will operate at a reduced level. Next, if the plentiful rain and snow this season lead to growing heifer retention, fewer heifers will go to feedlots. Finally, the resulting lower beef production could be lower by as much as 1.4 billion pounds from last year.
An\ key category in the upcoming census report is beef cow replacements, which indicates the level of heifer retention in 2022. Analyst calculations of replacements range from a 3.0 percent decline to a 4.2%. on last year. Nelson calculates that the number was 5.443M head, down 3.0%.