We are to the point in the year when questions are starting to be seriously asked about expectations for January 1, 2019 cattle inventory. Let’s focus on beef cow inventory and the slaughter levels in the fourth quarter that will take us there.

A quick recap of January 1 Cattle Inventory in 2018, which indicated that the number of beef cows that calved is 31.7 million head and 6.1 million heifers held for beef cow replacement. Drought and high numbers of heifers placed into feedlots suggest the growth rate in the cow herd has slowed significantly or stopped.

The Livestock Marketing Information Center (LMIC) forecasts are in the camp that beef cow inventory on January 1, 2019 will likely be slightly above January 1, 2018, based on current female beef slaughter levels to date and the proportion of that figure relative to Jan. 1, 2018 cow numbers.

The combination of Federally Inspected heifer slaughter and other cow (non-dairy type) through the first 8 months of the year was 8 million head, about 9.4 percent above last year. If that number held the rest of the year, it would indicate that January 1 beef cow inventory would be nearly exactly even with a year ago. The preliminary weekly slaughter data available for September shows female beef slaughter was 5.5 percent larger than 2017. This would bring the year to date value down to 8.9 percent, bringing January 1, 2019 slightly above a year ago if that number holds.

LMIC estimates annual beef cow and heifer slaughter will need to be about 9 percent to 9.5 percent above year ago to maintain a beef cow herd even with the prior year. This is only possible if the fourth quarter continues to slaughter high levels of female beef-type animals at a level that is over 9.2 percent for the quarter. September’s slowing slaughter rate suggests this is unlikely.

Using the relationship between heifer and beef cow slaughter, we estimate that annual slaughter levels would need to be 15 percent above a year ago in order for the beef cow inventory number on January 1 to be 1 percent below the 31.7 million estimated on January 1, 2018. Similarly, in order for 2019’s January 1, beef cow inventory to be up a full 1 percent, beef cow and heifer slaughter would need to moderate in the fourth quarter to reach an annual percentage increase of 3.3 percent above last year.

By our estimates, female beef slaughter is likely to moderate in the fourth quarter, but is unlikely to be pulled down as far as to cause a 1 percent gain in the January 1 figure.

Our current estimates put annual female heifer and beef cow slaughter up 8.4 percent year-over-year, leading to an estimate of up 0.2-0.5 percent on January 1.

With one full quarter left to the year, these estimates are subject to change and use normal relationships to set predictions. Heifer and beef cow slaughter will be the number to watch moving forward with a keen eye to see if these relationships will hold this year.

– Daily Livestock Report