Yuri Clemets Daglia Calil

In the previous SAT livestock article, Dr. Griffith asked about the girls’ whereabouts. Last week, the USDA/NASS released the 2022 Agricultural Census. Every five years, the Census takes a snapshot of U.S. agricultural operations. There is a wealth of interesting insights in the census data.  The data also sheds light on the structural changes in beef cow operations. The decrease in beef cow ranches could slow future herd expansion. 

Figure 1 highlights the decline in beef and milk cow farms. Between 2017 and 2022, 106,844 beef cow ranches disappeared, a 15 percent drop. In the same period, milk cow farms decreased by 34 percent. In contrast to the 2012 drought, we have fewer beef cow ranches to rebuild the herd, making it more challenging to find our girls. The contractions in cow farms are steeper than the overall number of farmers, which has declined by 6.9 percent, according to USDA/NASS. 

Figure 1 – Number of Cow Farms: 2002 – 2022.

Although there has been a decline in beef cow farms, the Census has reported an increase of 1,034 ranches with more than 500 head (Fig. 2). From 2017 to 2022, the beef cow herd has decreased by 2.5 million head. However, there has been an increase of 839,603 head in farms with more than 500 head. It indicates industry consolidation, providing insights into where we may find our girls.   

Figure 2 – Number of Beef Cow Farms by Herd Size: 2017 – 2022.

Beef cow farms shrunk across all farm size categories (Fig. 3). Most beef cow ranches are between 10 and 49.9 acres. Between 2017 and 2022, this category displayed the smallest drop, 9 percent, showing its resilience. But, during this period, the extremes recorded the most significant declines, producers with 1 to 10 acres declined by 23 percent, and 1000 to 2000 acres ranches declined by 20 percent. Regardless of the production scale, environmental, and economic factors affected beef cow ranches’ survivorship.

Figure 3 – Number of Beef Cow Farms by Herd Size: 2017 – 2022.

The 2022 USDA/NASS Agricultural Census reported a decline in beef cow operations from 2017 to 2022.  The census also reported some growth in larger operations.  The effect of fewer total operations on the speed of herd rebuilding remains to be seen.

Calil, Yuri. “Ag Census Reveals Fewer Beef Cow Farms.” Southern Ag Today 4(8.2). February 20, 2024. Permalink

Lamb and mutton production has followed the usual historical pattern this year, hitting a peak in Spring and increasing from Summer lows this Fall. Production peaked at the end of the first quarter, outpacing 2022 numbers. Then, production declined, reaching a low in July. In recent weeks production has exceeded that of 2022.  You’ll notice the sharp production decline in the chart indicating the Thanksgiving shortened work week.

From January to November 2023, federally inspected (FI) lamb and mutton production totaled 102.1 million pounds. This represents a 2.7 percent drop compared to the same period of 2022. Despite that production decline, the number of sheep and lambs slaughtered jumped 3.4 percent, from 1.38 to 1.63 million head. Weight is the crux of the matter. Average FI live weight declined by 6.3 percent. Over the abovementioned period, the average sheep and lamb live weight dropped from 132.7 to 124.3 pounds. Likewise, dressed weight has decreased, on average, by 6%. Lighter weights reflect more, lighter hair sheep, lambs going to non-traditional markets at lighter slaughter weights, and likely fewer fed in feedlots this year.

Total supplies include imports and cold storage stocks. The cold storage reached 26.1 million pounds in October, 9 percent less than the same month in 2022. Lamb and mutton imports plummeted 17.4 percent so far this year. From January to September 2023, the U.S. imported 174 million pounds. The country brought in 211 million pounds during the same period last year.

Live lamb prices collapsed midway through 2022 and have spent most of this year trying to recover.  By mid-year 2023 lamb prices had recovered to exceed those of 2022. After that, national negotiated live prices have hovered at around $200 per cwt.  Even though prices have begun to decline in recent weeks, tighter overall supplies from domestic production, reduced imports, and less in cold storage have boosted prices above year ago levels.

There appears to be renewed interest in lamb production in the South, based on questions some of us livestock economists here at SAT receive.  Price recovery should continue that interest over time and provide a boost to those who have started production.

Clemets Daglia Calil, Yuri. “Lamb And Mutton Production Shrinks This Year.” Southern Ag Today 3(48.2). November 28, 2023. Permalink

In last week’s Southern Ag Today article, Andrew Griffith discussed whether the ranchers should feed or breed their heifers in the current market. He stressed the relevance of feed, capital, and labor costs. Here, I briefly discuss the prices of two crucial feed inputs: corn and hay. Along with pasture quality, these inputs are essential for herd recovery and expansion.

While cattle prices continue to have an upward trend, corn markets show a different pattern. Global ending stocks (311.05 MMT) and plentiful production in the U.S. (15.1 B bushels) are driving corn prices down (Figure 1). Last August, corn prices hovered above $7/bu. Recently, corn is trading below $5.50/bu. Of course, lower corn prices boost feeder prices. 

Figure 1 – 600-900 Feeder and Corn Prices: Aug/2022 – Aug/2023

The price and availability of hay is also crucial to the decision to retain animals. Hay is the 3^rd largest crop in the U.S. by number of acres harvested (USDA-NASS). Figure 2 contains U.S. average hay prices. Fertilizer and fuel costs swelled forage production costs and drought cut production in many areas of the country.  Higher hay prices than last year suggests we are still suffering from the effects of drought. 

Figure 2 – Hay Prices

USDA’s latest hay production report indicates some growth in hay inventory. Nationwide, hay supplies are expected to rebound about 5 percent compared to last year.  But, longer term, hay production has declined 24 percent over the past 20 years. Yields have declined from 2.48 to 2.29 tons/acre during the same period. 

While much of Louisiana and Texas remain in drought, most of the rest of the South is drought free. Less expensive feed and better pasture conditions may provide opportunity for some herd growth.  

References

Griffith, Andrew P. To Breed or To Feed? Southern Ag Today 3(34.2). August 22, 2023. Permalink

USDA – NASS (2023). Available online: https://quickstats.nass.usda.gov/

Beef Cattle Decision Aids. Available online: https://agecoext.tamu.edu/resources/decisionaids/beef/