Economic Tidbits

Nebraska Cow Inventory Lowest in 60 Years

Nebraska’s beef factory, its beef cow herd, numbered 1.703 million head on January 1, off 5 percent from last year according to USDA National Agricultural Statistics Service (Figure 1). One must go back 60 years, to 1963, to hear fewer “moos” in the state. The herd is down almost 11 percent since hitting the most recent peak in 2019. This year marks the fourth consecutive year of declines. As an aside, the largest herd recorded in the state occurred in 1975 with 2.374 million head. Nebraska’s herd ranks fourth largest among states trailing Texas, Oklahoma, and Missouri. Replacement heifers were also down at 320,000 head, off 30,000 or 8.6 percent, the lowest since 2011 (Figure 2). Nebraska’s calf crop last year totaled 1.640 million, off 2 percent.

The decline in the number of cows isn’t surprising. Most people were expecting it given the lingering drought and higher feed costs. Also, the pace of cow slaughter and heifers placed in feedlots last year pointed to a smaller herd this year. Fewer cows and heifers mean fewer calves this year. It also means higher cattle prices as cattle supplies are tight. Futures prices for both feeder and fed cattle in forward months are priced higher than nearby contracts. Higher prices could mean better per cow profits. The last time cattle inventories were this tight, producers saw record per cow profits.

A question for many observers is whether higher cattle prices will entice producers to consider herd expansion this year? Derrell Peel, livestock economist at Oklahoma State University, notes the quarterly feedlot heifer inventories on January 1 shrunk for the first time since July 2021 which some people might think is an indication the tide has turned. But Peel isn’t convinced. He believes it’s simply a lack of heifers. Given the numbers, drought, and forage supplies, it’s difficult to see a herd expansion in 2023. It will more likely be 2024 or 2025 before a rebuild of the herd starts.

Figure 1. Beef Cow Inventory in Nebraska, 1990-2023

Source: USDA National Agricultural Statistics Service

Figure 2. Heifers Held for Replacement in Nebraska, 1990-2023

Source: USDA National Agricultural Statistics Service

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