The end of cattle herd expansion?

The new Cattle Inventory report provides the first real estimate of the 2018 calf crop, as well as a look at how rapidly the U.S. cattle herd is increasing. The July first all cattle and calves number was one percent higher than last year, the preliminary estimate of the U.S. calf crop was two percent higher, and the cattle on feed inventory was four percent larger than in 2017. Professor James Mintert of Purdue University looked at the numbers and says lower feed grain prices this fall may lead to more placements of lighter-weight cattle on feed, which will impact fed cattle marketings in 2019 because the lighter weights mean cattle need to stay on feed longer. Cattle slaughter has been two percent higher than last year, picking up speed in May and June. More females are in the slaughter mix, which means herd growth could be coming to an end. Mintert says, “The rise in females in the slaughter mix isn’t large enough to suggest that liquidation is taking place, but it is indicative of waning interest in herd expansion.” Rising tariffs on U.S. meat exports are also expected to have a heavier impact during the second half of 2018.