SPRING HILL, Tenn. – There were 91.9 million head of cattle and calves on U.S. farms as of Jan. 1, 2022, which was 2 percent below the 93.8 million head on Jan. 1, 2021, according to the latest USDA Bi-annual Cattle Report, released Jan. 31.

“It was pretty much in line with what I was expecting concerning all cattle and calves, and the number of beef cows,” said Andrew P. Griffith, University of Tennessee associate professor of agricultural economics.

“We had seen such an increase in cow slaughter and heifer slaughter that there was no doubt inventory would be down 2 percent,” he said. “In the meetings I did prior to the release, I said 2 percent decline in all cattle and calves, and beef cows. I missed the beef cows slightly.”

Griffith said most of the pre-report estimates missed the mark, compared to the National Agricultural Statistics Service survey.

“The average pre-report estimate for all cattle and calves was a decline of 1.2 percent, and it ended up being 2 percent, which is a difference of 762,000 head of animals,” he said.

“Similarly, the pre-report estimate average for beef cows was a decline of 1.8 percent, while the report stated a 2.4 percent decline, meaning the National Agricultural Statistics Service report trimmed off an additional 163,000 head of beef cows relative to the pre-report estimate average,” he added.

Derrell Peel, Oklahoma State University professor of agricultural economics, said several numbers in the report were lower than expected, making this report read as more bullish (a market that is on the rise and is economically sound).

“The all-cattle inventory was down 2 percent, lower than the lowest expectation,” he said. “The beef cow inventory was down 2.3 percent, lower than the lowest expectation. The beef replacement heifer was down 3.3 percent, lower than the average expectation, but within the range of expectations.”

Griffith said the biggest surprise in the report for the industry was “probably the cattle on feed.”

“The value likely exceeded expectations because of the number of cattle that exited winter grazing (wheat) early due to dryness, or the anticipation of harvesting wheat for grain this year,” he said.

The report said cattle on feed in feedlots with capacity of 1,000 or more head accounted for 81.9 percent of the total cattle on feed, up slightly from the previous year.

“This report highlights that cattle numbers are tighter than perhaps generally recognized, and will add additional support to cattle markets in 2022,” Peel said.

“From various inventory categories, the calculated estimate of feeder cattle supplies is down 2.6 percent,” he added. “Feedlot numbers will decline more in the coming months, leading to decreased beef production in 2022.”

The report said combined total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots) at 25.5 million head, was 3 percent below Jan. 1, 2021.

According to the report, all cows and heifers that have calved, at 39.5 million head, were 2 percent below the 40.3 million head on Jan. 1. Beef cows, at 30.1 million head, were down 2 percent from a year ago. Milk cows, at 9.38 million head, were down 1 percent from the previous year.

The report said all heifers 500 pounds and over totaled 19.8 million head, 2 percent below the 20.2 million head on Jan. 1, 2021. Beef replacement heifers, at 5.61 million head, were down 3 percent from a year ago. Milk replacement heifers, at 4.45 million head, were down 3 percent from the previous year. Other heifers, at 9.71 million head, were 1 percent below a year earlier.

In addition, steers weighing 500 pounds and over totaled 16.6 million head, down 1 percent from Jan. 1, 2021. Bulls weighing 500 pounds and over totaled 2.11 million head, down 5 percent from Jan. 1, 2021.

The report also said calves under 500 pounds totaled 13.9 million head, down 3 percent from Jan. 1, 2021.

Moreover, U.S. cattle and calves on feed for the slaughter market for all feedlots totaled 14.7 million head, up slightly from the Jan. 1, 2021, total of 14.7 million head.

The report said the 2021 U.S. calf crop was estimated at 35.1 million head, down 1 percent from the previous year’s calf crop.

The report added calves born during the first half of 2021 were estimated at 25.6 million head, down 1 percent from the first half of 2020.

Calves born during the second half of 2021 were estimated at 9.46 million head, 27 percent of the total 2021 calf crop; all inventory and calf crop estimates for July 1, 2020, Jan. 1, 2021, and July 1, 2021, were reviewed using calf crop.

“The lower numbers in the report are contributing to additional support in cattle markets beyond what was already baked into the markets recently,” Peel said.

He said the drought in 2021 contributed to the larger-than-expected herd decline, and the lower inventory of replacement heifers going into 2022. “Continuing drought conditions could result in significant additional herd liquidation in 2022,” he said.

But Griffith said it’s difficult to say how much drought played into these values since there was a reduction in beef cow inventory across much of the country, including the Southeast, which had adequate moisture most of the year.

“However, it is clear drought pulled cattle out of the Northern Plains, with most of those cattle coming out of South Dakota, Montana and Nebraska,” he said. “Drought in that region actually started in August of 2020, and persisted until recently.

“Texas was the other big loser of cows and drought has been on and off in that region since what feels like the beginning of time, but it has gained firm footing the past several months,” he added. “Drought played a part, but market prices in 2021 were probably still the bigger player.”

The report said in Illinois, all cattle and calves as of Jan. 1, 2022, totaled 1 million head, down 5 percent from Jan. 1, 2021. All cows and heifers that have calved, at 420,000 head, are down 2 percent from a year ago, and the 2021 calf crop was estimated at 360,000 head, down 4 percent from 2020.

In Indiana, all cattle and calves were 810,000 head, down 5 percent from last year. Beef cow numbers remained unchanged at 184,000 head, with beef replacement heifers decreasing 8 percent to 35,000 head.

Indiana milk cows decreased 3 percent to 186,000 head. Heifers for milk cow replacement decreased 22 percent to 60,000 head, and the 2021 calf crop was 330,000 head, down 3 percent from 2020.

In Iowa, all cattle and calves totaled 3.85 million head, up 150,000 head from Jan. 1, 2021. Beef cows, at 925,000 head, were up 65,000 head from last year. Milk cow inventory was up 5,000 head at 225,000 head.

In Kentucky, the cattle and calf inventory was estimated at 2.02 million head. Total inventory was down 70,000 head from last year. Cows and heifers that have calved were estimated at 1.01 million head, down 10,000 head from the 1.02 million for 2021. Beef cow inventory was estimated at 966,000 head, and milk cows were estimated at 44,000 head.

In Michigan, all cattle and calves were 1.12 million head, down 2 percent from last year. Beef cow numbers decreased 4 percent to 96,000 head. Beef replacement heifers increased 15 percent to 23,000 head. Milk cows decreased 1 percent to 434,000 head. Heifers for milk cow replacement decreased 5 percent to 152,000 head, and the 2021 calf crop was 395,000 head, down 1 percent from 2020.

In Ohio, all cattle and calves in Ohio were 1.30 million head, up 3 percent from last year. Beef cow numbers increased 7 percent to 312,000 head. Beef replacement heifers remained unchanged at 70,000 head. Milk cows decreased 4 percent to 248,000 head. Heifers for milk cow replacement decreased 4 percent to 120,000 head, and the 2021 calf crop was 490,000 head, up 4 percent from 2020.

In Tennessee, the cattle and calf inventory was estimated at 1.75 million head. Total inventory was down 40,000 head from last year. Cows and heifers that have calved were estimated at 920,000 head, down 10,000 head from the 930,000 for 2021. Beef cow inventory was estimated at 893,000 head, and milk cows were estimated at 27,000 head.

Overall, Griffith said, “Fewer cows, a smaller calf crop in 2021, and now an expected smaller calf crop in 2022, will certainly support calf and feeder cattle prices in 2022, 2023, and possibly into 2024. Inventory says the market is ready for a bull market, but we know outside factors can change those expectations.”