The number of cattle in the U.S. declined in 2019 for the first time in five years, a development that has the potential to benefit ranchers in the state in the immediate future.
Aggregate cattle stocks decreased throughout the country during 2019, according to a biannual report issued Friday the U.S. Department of Agriculture. There were 94.4 million head of cattle and calves in the country as of Jan. 1, 2020, a decrease of about 400,000 — or less than four-tenths of a percent — from the start of 2019, when there were 94.8 million.
The publication showed declines throughout the year in several categories, including the cows and heifers that had calved, which fell to 40.7 million from 41 million to 40.7 million, or just less than 1%. The number of steers weighing 500 pounds or more, the number of bulls weighing 500 pounds or more and the calf crop all decreased by about 1%.
Scott Brown, a professor or agriculture and applied economics at the University of Missouri, said those 1% declines are significant. “When you realize we have been growing inventory for several years, this is the first time since 2014 that we have actually seen lower inventory,” he said.
Moving forward, the figures suggest there would be fewer slaughter cattle runs later in the year and into next year.
“It should help strengthen prices, all else equal, with less supplies,” Brown said. “That is the positive if you are a producer hoping for higher prices.”
This is welcome news for producers who are relying on some price relief. Cattle spot prices today are a fraction of what they were six years ago. According to Markets Insider, prices hit a decade high of $1.70 per pound during November 2014. They were lower than $1 per pound as recently as September 2019 before rebounding to about $1.20 per pound at the end of January.
Although total inventories declined in the U.S., there were a handful of states, Missouri included, in which inventories increased.
There were 4.25 million head of cattle in Missouri 2019. For 2020, the figure increased by 100,000, or about 2%.
Despite that, Brown warned supplies are only one factor that determines price, revenues and profitability.
“How strong demand is going to pull on this issue will be the other part,” he said. “Exports matter a lot in this discussion for 2020.”