By DOUG GRAVES
Ohio Correspondent

HILLSBORO, Ohio — The USDA released its Jan. 1 cattle inventory estimates and the news is disappointing. Beef cow numbers continue to fall as producers seem to want out of the business.

“The continued decline is related to multiyear financial discouragement due to high and volatile feed prices, shortages of pastures in some areas last summer, and developing dry conditions in the Southeast and the central and southern plains,” said Purdue University Extension economist Chris Hurt.

According to Hurt, beef cow numbers at 30.9 million head are down two percent over the past year and down six percent since 2005.

Regionally, the largest decline in beef cows was in the western Corn Belt, where numbers declined by 168,000 head the past year. This decline was led by Missouri with 103,000 fewer head and Iowa with a 45,000 head reduction. The southern plains had a reduction of 166,000 head, led by Texas with 115,000 fewer head. The southeastern region saw the largest decline of 121,000 head.

Ohio is feeling the fewer numbers as well. John Grimes, Ohio’s Extension beef coordinator, was appointed to head Ohio’s new beef post in January in an attempt to share information across all industry sectors to add economic value to Ohio’s beef production. Even Grimes feels the decline in beef.

“When a full cow is worth 70 cents a pound at market the temptation is to sell them immediately,” Grimes said. “Many guys I know are selling off because they want to capitalize on the current grain prices. There’s many other reasons for the decline, including drought and floods. Just as the oil market is volatile, so is the beef market.

“The consumer is feeling it too. It’s a bumpy ride right now with the high cost of beef, and I’ve wondered how much the consumer can stand.”
Beef prices concern Hurt as well.

“How high will beef prices rise? Prices have already been record high and seem assured of making new highs throughout 2011,” Hurt said. “Live cattle futures prices on Jan. 31 are suggesting that finished cattle will average about $113 per hundredweight for the year with quarterly prices of $108, $116, $112 and $115 respectively. These prices are supported by recovering U.S. and world consumer incomes, small beef and pork supplies and a rapid increase in pork exports.”

And just what will change the attitude of beef producers? Hurt points to two key factors – a return to profitability and more abundant forage and feed supplies. Hurt adds that it will be early 2012 before any movement toward expansion will occur.

Hurt also states it is possible that corn and soybean meal supplies could increase with large 2011 crop production. Unfortunately, given the limited number of acres available, trend yields may do little to increase inventories, keeping the 2011/2012 marketing year prices high and volatile.

Increasing concerns about dry conditions throughout the regions mentioned above will keep producers from expanding until those conditions change. Those three regions account for 55 percent of the beef cows.

“Much is riding on the weather in 2011 for both crop and livestock producers,” Hurt said.

Beef producers are surviving, though, and just hoping exports remain high. Exports seem to be keeping many producers optimistic.

“The only good news is exports have been good. Last year, we exported more beef than we imported into the U.S.,” Grimes added. “We’re just hoping things get better here in the U.S.”