US cattle herd growing fast but likely to slow

02 August 2016

The sharp increase in cattle prices in the US from 2013 to early 2015, which were driven by six-decade lows in the US cattle herd, served as a strong inducement to producers to increase cattle herds. Figures from the US Cattle Marketing Information Service suggest that the inducement was well acted on, with sharp increases in the numbers of breeding cattle and feeder cattle/calves outside feedlots between 2014 and 2016 (as at 1 July).

The growth in US cattle numbers has been faster than expected, and there has been a corresponding large increase in beef production so far in 2016, and a sharp drop in cattle and beef prices since the beginning of 2015.

As at 1 July 2016, the US beef cow herd was estimated to have increased 1.03 million head on the previous year, to around 30.35 million head, with growth to mid-2017 forecast to slow to 670,000 head, bringing the total to 31 million head. For feeder cattle and calves outside feedlots, numbers were estimated to have jumped 1.2 million head from mid-2015 to mid-2016, to 36.7 million head, suggesting ample supplies of cattle for placement in feedlots in the next year.

The potential for further growth in US cattle supplies has become weaker as a result of the drop in cattle prices. The incentive to grow cattle herds is not as strong as two years ago, and beef cow slaughter in 2016 is already reflective of this. The 2016 forecast for beef cow slaughter is 2.55 million head, 12% higher than 2015, and is expected to increase further in 2017 and 2018. The 2016 figure is still within the ‘expansion’ rate compared to total beef cow numbers, but is higher than previously expected. Further to this is a reported increase in the number of heifers being placed in feedlots, as opposed to being retained for breeding. This will have a delayed effect on herd growth, likely from 2018.

As a result of the large increases in cattle numbers over the past two years, US cattle slaughter is forecast to lift significantly over the next few years, with beef production likely to reach a record high towards the end of the decade. This growth in beef production, along with expected increases in other meat production, is likely to keep a ceiling for beef and cattle prices in place in the US over the next few years.

Back to News

Join myMLA today

One username and password for key integrity and information Systems (LPA/NVD, NLIS, MSA & LDL).

A personalised online dashboard that provides news, weather, events and R&D tools relevant to you.

Customised market information and analysis.

Learn more about myMLA

myMLA Sign Up

Already registered for myMLA?

Sign in here