Pictures of Iowa's Map Iowa Beef
Antithesis literally means opposite. People use it in everyday speech when describing 2 ideas or terms that are placed in strong contrast to each other. Some common ones are: go big or go home; get decorated living or go decorated dying; no hurting, no gain; no guts, no glory. One even helps explain academics — those who tin can, do; those who tin can't practise, teach.
Can producers utilise knowledge of the cattle cycle to brand more than profitable investment decisions? Yes, if they apply ii basic principles. Showtime, buy low and sell high. Second, find out what everyone else is doing and do the opposite. While easier said than done, these principles tin provide some guidance when making long range plans.
Iowa climbs in beefiness cow rankings
A year ago, Iowa was the 13th largest beef cow state with two.viii% of the national beef cow herd. Today, Iowa ranks 10th with 3.1% of the Us inventory. Thirteenth is the lowest Iowa has sat in the rankings, as well beingness there on Jan ane, 2011. In the last 30 years, Iowa has made it as high every bit the ninth largest beef moo-cow state three times — at the beginning of 1993, 2016, and 2017.
The beef cow herd is the foundation of the total cattle inventory and Iowa appears to be leading the national herd by near 2 years in the current cattle bicycle. Iowa'due south beefiness cow herd last peaked on January 1, 2017 at 965,000 beef cows and fell to 860,000 beef cows on January i, 2021 (Figure 1). The U.s. beef cow inventory peaked on January 1, 2019 at 31.691 million caput and has not yet hit its cyclical bottom.
The 30.125 million beef cows in the United States as of January 1, 2022 were down ii.three% from January 1, 2021 according to the USDA National Agricultural Statistics Service, Cattle inventory report.
Two-thirds of u.s.a. reported fewer beef cows than a year ago. This was headlined past 189,000 fewer beef cows in South Dakota and 160,000 fewer beef cows in Texas (Figure two). Missouri and Montana were each down 94,000 and 90,000 head, respectively, while Nebraska had 48,000 fewer beefiness cows.
Iowa'south 925,000 beefiness cows were up 7.6% from a twelvemonth ago. The 65,000 head gain was the largest of whatever country. Idaho rose 34,000 head. Minnesota grew by 25,000 caput. Ohio was up twenty,000 beef cows, a notable six.8% year-over-yr rise.
Beef replacement heifers nationally as of January i, 2022 totaled five.612 million head, 3.3% below the five.803 one thousand thousand head on January one, 2021 (Table ane). Beefiness replacement heifers in Iowa, at 160,000 caput, were upwardly 3.2% which is on top of the previous year's 6.9% ascent.
Investment timing matters
The market value of cows is one factor influencing herd investment strategies, and results. Every bit calf prices ascension, the value of bred cows, replacement heifers, and choose animals all rise. Convenance stock will sell at college prices over the next couple of years.
Beef cow herds are majuscule-intensive enterprises and should be viewed equally other capital investments. The initial investment in cows, purchased heifers or subcontract-raised replacement heifers generates a hereafter earnings stream from calf sales that provides a return on the original investment. The cull income at the end of the cow's productive life provides a relieve value. The timing of when you lot invest impacts the return considering the cattle cycle impacts the investment price and future earnings.
Many producers who are trimming herds now likely bought them at very high prices, by buying or retaining exceptionally more heifers dorsum in 2014 and 2015. The replacement females may not have paid for themselves yet. But, the situation has been complicated past widespread drought in 2021 which impacted what many producers had to do as opposed to what they would have liked to do. The same may be true in 2022.
The cost of producing or purchasing feed accounts for nearly 3-quarters of the total operating cost in cow-dogie production. Types and costs of feed used are quite variable. Producers non only graze cows on pasture and range, but also on land used primarily for other purposes. For example, ingather residues are oft grazed following harvest. Conditions atmospheric condition in Iowa were mild, including a lack of snow embrace, until the middle of January this year and cattle continued to graze on corn stalks, minimizing the need for supplemental hay. In other regions, drought and poor grazing conditions were limiting factors and may have neutralized any cost advantages.
Cost structure also matters
The portion of production costs that are stock-still and the portion that are variable can significantly impact the benefits or costs producers experience past trimming or growing their herds. When times are tough, farms with relatively high variable costs and low stock-still costs benefit about from herd reductions. If these farms sell their least-productive cows, then boilerplate production per moo-cow should ascent. This will lower the average variable toll for each calf produced. Stock-still costs per unit produced will likewise change. These farms now have fewer cows producing fewer calves to spread their costs around, so boilerplate fixed toll per moo-cow rises. Merely because fixed costs were relatively low to begin with, the net event on total price of the herd reduction may well be positive. On the other hand, herd expansions or holding inventories all-time suit farms with a lower variable toll and higher fixed cost structure. Therefore, reducing the moo-cow herd during depression price periods does not benefit every farm.
USDA'due south Economical Research Service defines subcontract resources regions based on geography and a host of other factors. North and South Dakota are in the Northern Not bad Plains region. Parts of Montana, Wyoming, Nebraska and Colorado are also in this region. Co-ordinate to the Commodity Costs and Returns estimates, this region traditionally has the highest proportion of variable cost equally a percentage of full cost, that is, a 50/50 pct split on stock-still and variable costs. In 2021, variable costs certainly skyrocketed in the region due to weather and feed prices. Not coincidentally, these states notably trimmed beef cow herds.
The Heartland region, which includes Iowa, is estimated to have a 60/forty dissever on fixed and variable costs. Increasing the beef cow herd, fifty-fifty during a relatively tight margin period, can be beneficial with such a cost structure. If these farms are losing coin on every calf, they would lose more money after reducing their herd, considering full unit production cost would increase dramatically driven by a much higher fixed cost. Adding cows may allow them to lose less or make more than.
Price impact in Iowa
I received an insightful question in response to the recent dynamics in cattle inventories. The question, "Volition having more cattle in Iowa impact local cash prices?" Remember, when supplies rising, all else equal, prices tend to refuse.
The change in Iowa inventories does little to bear upon the downturn in the total U.s. cattle inventory. Prices tend to vary inversely (though not perfectly) with cattle numbers, meaning that as inventories decline nationally, all prices should increment. Likewise, cash price differences reflect quality differences. Iowa has a reputation for producing high quality cattle.
Iowa is in the top ten nationally for cow-dogie production and top four for cattle on feed, meaning Iowa is a cyberspace importer of cattle for finishing. If annihilation, recent dynamics may motility Iowa to being more self-sustainable, helping to insulate from outside shocks, and becoming even more competitive on the national mural.
Source: https://www.farmforum.net/story/news/2022/02/24/iowas-beef-cow-herd-off-and-running/6879359001/
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