Close Says Decline In Pastureland, Weak Link Of Herd Expansion

The U.S. cattle industry is already starting to see some solid herd expansion, Rabo AgriFinance Senior Analyst Don Close said the expansion seen in 2014 exceeded his expectations, but more is needed. He said there is a dire need to increase cow numbers, as those calves could provide the support need for the industry’s infrastructure of feed yards and processing plants.

Now that herd expansion is taking place, Close wonders if grass availability will become a limiting factor. Over the last ten years, US Ag Census Data has shown the 2002 and 2012 Census showed total pasture acres declined by about six percent or 31 million acres.

“I think as long as we were in a situation when cattle numbers were declining faster than acreage numbers, it kind of went under the radar,” Close said.

Now with the potential for sustained growth in this industry, Close said this may push producers to weigh options that require less land. According to a new report from Razorback Food & Agribusiness (FAR) Research and Advisory group. The report, “Outside In: Confined Cow-Calf Production as a Viable Model for Rebuilding the U.S. Cow Herd Numbers” finds that more innovation is paramount to the growth of the U.S. cattle sector.

Now with herd expansion taking place, the cattle industry needs to determine what an ideal cattle herd size is. Close said he recommends a number between 32 and 34 million head. In looking at the beef cow inventory chart, he said that’s the numeric number that was set when cattle numbers stabilized and flatten out. With increased efficiencies, heavier carcass weights, the nation may not need that many cattle to produce that quantity of beef. With strong domestic demand and solid export growth, Close said if the U.S. is going to regain market share he thinks we need to push the envelope.   With strong returns, there are positive signals to continue to expand the herd. Close said with great economic returns, somebody is going to respond.

With this reduction in grazable acres, Close said there may not be enough pasture acres available for the beef industry to fully rebuild the U.S. beef cow herd. He said one way to overcome fewer pasture acres available might be to keep some of those mamma cows in empty feedlot pens, especially in the Southern Plains.