TENNESSEE CATTLE HERD DIPS LOWER
February 14, 2011
Tennessee’s cattle herd fell 2 percent at 1,990,000 head in the recent cattle count as reported by the Tennessee Field Office of the National Agricultural Statistics Service. The herd had rebounded during 2009 following two years of declining numbers after the drought of 2007. High fertilizer and other costs in 2008 also caused some producers to leave the business or reduce herds. Last year the beef cow herd fell to 990,000 head, a 1 percent drop. Very dry weather in some counties was a factor, plus we had very high cull cow prices in 2010, averaging $116 per head higher than 2009 for a 1,000 pound Utility cow. This combination coupled with the need of some families for cash flow contributed to the reduction in the cow herd. Further confirming the need for cash was the 12 percent reduction in beef replacement heifers, the 5 percent reduction in steers over 500 pounds and the 4 percent reduction in calves under 500 pounds. Prices for most weights of stocker calves and feeder cattle were up 25 to 30 percent over 2009, so it was natural for folks to cash in on those higher prices. Many fall calves were sold in the spring of 2010 when prices rose sharply. The feeder price rally has continued into 2011 with a 10 percent increase in January. Tennessee still ranks 9th in the U.S. in beef cow numbers. Most all of the states South of Tennessee had fewer cows than a year ago. Kentucky had a 4 percent reduction.
Tennessee milk cow numbers totaled 50,000 head in the report down 3,000 or 6 percent. Milk replacement heifers were unchanged at 35,000 head. There are several producers engaged in development of milk replacement heifers who do not run a dairy, thus the stable number is not surprising. One inventory estimate which was a little surprising was the 10,000 head of cattle on feed for slaughter up from 5,000 head in the January 2010 report. We know there is increased interest in production of cattle for freezer beef in the state. In addition, there are several cattle being finished for slaughter out of state, but the 5,000 head increase was not expected. The other category showing an increase was beef heifers over 500 pounds not designated as replacements. These totaled 80,000 head, a 14 percent increase from 2010. Probably these cattle are being backgrounded and some could become replacement heifers.
In the U.S., total cattle numbers were down 1 percent, with beef cows down 2 percent and beef replacements down 5 percent. Again, the combination of drought in some areas and need for cash flow by beef producers were likely the main reasons for the lower numbers. With an increase in exports, a reduction in imports and smaller cattle herd, prices are expected to continue to exceed those of 2010. With rising grain prices, costs are expected to go up as well. For margin operations like stocker/backgrounders, price risk management for both feed and cattle will be important. Supplies are tight enough that market prices are very volatile and reactive to bullish and bearish news of most any kind. This can produce both opportunities and risks which managers need to try to control. There are no current signs of rebuilding the cow herd, so prices are expected be strong for the next two to three years.