EXTENSION REPORT

What Does the Rest of 2006 and 2007 Look Like for Cattle Producers?

Cattle producers have been told by Agricultural Economists for the past couple of years that the current cattle cycle is on the downswing and that producers should look for decreasing prices in the future – with many Economists pointing to possibly 2007 as the year to begin the decline. However, the drought experienced in a large part of the country (every cattle producer in our area is certainly aware of the lack of rainfall in our area!) has caused replacement herd building to slow down. So what does that mean to producers? First let’s look at some statistics:

►As of January 1, 2006, the number of cows and heifers that have calved increased about 391,000 head to 42.3 million head, up .9 percent from a year ago.

►As of July 1, 2006, the number of cows and heifers that have calved increased about 200,000 head to 43 million head, up .5 percent from a year ago.

►As of January 1, 2006, the 2005 calf crop was estimated to be 37.8 million head, an increase of 155,000 head (+.4 percent) from a year ago.

►As of July 1, 2006, the 2006 calf crop was estimated to be approximately 37.9 million head, up 100,000 head (+.3 percent) from last year.

►U.S. beef exports are expected to show significant growth during 2006 and 2007. Future growth is expected to be gradual. It may take 3-5 years to reach pre-2003 U.S. beef export levels. However, the increase in U.S. beef export levels should help provide price support.

►The combination of higher levels of cow slaughter year to date and no change in July 2006 beef replacement heifers compared with a year-ago, suggests that cow-herd expansion has begun to slow down. Assuming that weather, feed and forages, and cattle prices permit, the January 1, 2007 cattle and calves inventory estimate will likely show only a modest increase in U.S. herd expansion.

What does this mean to producers? Hopefully, that if we are indeed on the down swing of the cattle cycle, decreases will be moderate. With the slowing of herd building and increase (hopefully) in exports, this will moderate price decreases that are expected through the end of this decade. In the end, we don’t know what the cattle market will do. We have to work off the predictions of economists who predict the future based on past and current trends. What we can do is plan to market our cattle in the most profitable way that we can. Whether that means combining with other producers to sell truckload lots of cattle, putting calves on a vaccination and preconditioning program, or selling source verified cattle, we must try to add as much value to our cattle as possible.

Producers should also be thinking about feed sources for the winter. Alabama Ag Statistics reported that hay harvested in Alabama during 2006 will be down about 50 percent. Winter annuals for grazing should be going in the ground now (if you don’t already have them planted). Producers that feed by-product and supplemental feedstuffs during the winter should attempt to book them or buy them now, as prices generally increase as cooler weather approaches. If we plan ahead now, it can save us money later in the year.

*Information taken from Ag Economic Series DAERS 06-5 – Timely information -2007 U.S. Beef Cattle Situation and Price Outlook (Walt Prevatt) and from Alabama Agricultural Statistics.

Beef Short Course

The Alabama Cooperative Extension System is joining Extension professionals from Louisiana State and Mississippi State Universities to host the 2006 Beef Short course focusing on herd health.  Producers will attend sessions on Monday, Nov. 6 and Tuesday, Nov. 14. Both sessions will run from 6 p.m. to 9 p.m. and will utilize videoconference technology in multiple locations throughout the three-state region. We will be offering the 2006 Beef Short course at the Jon Archer Agricultural Center in Mobile.

Topics included in Session I are cow/calf vaccination programs, prudent drug use for internal parasites and preconditioning programs.  Session II on Nov. 14 will focus on feedlot diseases, infertility of the beef herd, biosecurity practices and the 2005 National Beef Quality Audit.  Topics will be addressed by some of the top veterinarians in the country.

Cost of the program will be $15 for both nights. If you would like to attend please request a registration form by calling the Baldwin County Extension Office at 943-5611, ext. 2222 or 937-7176.

Email address: kellewi@aces.edu
Phone: (251) 867-7760

Issued in furtherance of Cooperative Extension work in agriculture and home economics, Acts of May 8 and June 30, 1914, and other related acts, in cooperation with the U.S. Department of Agriculture. The Alabama Cooperative Extension System (Alabama A&M University and Auburn University) offers educational programs, materials, and equal opportunity employment to all people without regard to race, color, national origin, religion, sex, age, veteran status, or disability.