Cattle producers have yet to pull the trigger when it comes to herd expansion, according to Kansas State University Extension Livestock Market Economist Dr. Glynn Tonsor, who outlines the picture from last month’s Cattle on Feed report.

“Heifer inventory was up one percent versus the year before, and heifers composed 40 percent of the total inventory, so the remaining 60, of course, were steers, but anytime we have that high of a percentage for the inventory then that is historically, at least, a pretty strong signal that ranches are not keeping their heifers at home and they are still finding their way to the feedyard. It is another fairly direct signal, at least to me, that nationally we have not pulled the trigger on expansion.” 

Tonsor says there is a lot of discussion about herd rebuilding, and while some ranches are in the process, collectively, the national cattle on feed-based numbers signal that herd expansion has not begun.

“There is interest, make no mistake. Mother Nature, drought conditions, those kinds of things definitely had a hand in this, borrowing rates and interest rates are a lot higher. They’re still several that and remember, they paid up a lot in 2013-2014 for replacement heifers, and a couple years later, they weren’t as happy with that. All of that is in the back of the minds of ranchers right now. I do think in 24, and 25, We’re going to be in process of rebuilding the herd. let’s you know, as of today, that’s my crystal ball forecast, but I don’t think we’ve done it yet.” 

One study that Tonsor conducts on a regular basis is feedlot profitability. His latest numbers suggest there is still profit out there in the feedlot sector, but not as much as a few weeks ago.

“Through Christmas, we are expecting positive returns for steers that will be leaving Kansas yards, and then it is kind of a mixed bag as we go through the first half of 2024’s projections. They are small losses to small gains. The main thing to probably highlight here is that compared to a month ago, at least on the front end, these four-to six-month projections, they are a fair amount lower than they were before.” 

There has been a $7.00, if not $9.00, per hundredweight pullback in the projected fed cattle price in recent weeks. Tonsor’s statistics are for cash prices and do not include risk management.