The US beef herd size periodically cycles through expansion and contraction with about a10 year cycle. this cycle is largely which take time to build due to the biology of cattle. The low point of the current beef cycle was 2014, following droughts in 2011 and 2012 along with high feed prices in 2013, led to large cattle herd reductions.
USDA recently released the 1 January Cattle Inventory report which confirmed the 1 July 19 preliminary cattle report. The 1 January report showed a small reduction in the US cattle inventory, down 400,000 head, but replacement numbers indicate this trend will continue. Beef replacements were 2% lower and dairy replacements were 1% lower than last year. USDA also revised downward the 1 July 19 calf crop estimate to follow the lower cow numbers.
These indicators will eventually mean fewer feedlot placements but that is not yet the case. USDA shows on 1 January that cattle on feed were 2% more than 1 year ago. In December 2019 feedlots placed 3% more cattle than 1 year ago and marketed 5 % more animals than 1 year earlier. Total cattle on feed is up 2% but the heifers on feed increased by 4%. This is another indicator that calf numbers will continue to decline and eventually rise. However one analyst suggests that 2020 prices are likely to remain close to 2019’s.
Franken, J. “2020 Cattle Inventory—Herd Expansion Comes to an End.” farmdoc daily (10):19, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, February 3, 2020