The July 1, 1996 CATTLE INVENTORY just released suggests that all cattle and calves in the United States, as of July 1, 1996, totaled 112 million head, down 1 percent from July 1, 1995, but up 1 percent from the 111.3 million head inventory count two years ago. This is the first inventory count in recent years that indicates that the U.S. cattle herd is declining.

The beef cow herd was estimated at 35.6 million head. This is 1 percent below July 1, 1995 and the same as July 1, 1994. Beef replacement heifers were estimated at 5.5 million head, down 4 percent. Steers weighing 500 pounds and over accounted for 15.4 million head. Bulls in the same weight category were estimated at 2.4 million head. Both of these categories were estimated as the same as last year and slightly higher than the July 1994 estimate. Calves under 500 pounds were estimated at 31.9 million head, down slightly from the 1995 estimate, but up 2 percent from 1994.

The following tables show the size of the U.S. cattle industry from 1985 to present with corresponding U.S. average prices for relevant categories. This information clearly shows the start of the last cattle cycle in 1989/90 and the expansion thereafter. It also shows prices received by cattle producers for their calves as supplies change.

Will this cycle follow the pattern established in previous cattle cycles? The last five cattle cycles have ranged from eight to eleven years with an average of about 9 years. If this pattern holds true, we are looking for inventory levels to keep falling through next year into 1998 before cattle producers can expect any price relief.

This mid-year inventory report indicates an increase in beef cow slaughter. Beef cow slaughter in the U.S. is up 25 to 30 percent over last year's rate. The slaughter rate is being accelerated by the drought in the Southern Plains and high feed prices. However, even with this increased cow slaughter, cow inventory numbers will continue to fall substantially this Fall. Cattle producers not in drought affected areas are still waiting for this year's calf crop to be weaned before they start the process of culling their herds.

    TABLE 1:   U.S. CATTLE INVENTORY AND ANNUAL BEEF PRICES: 1984-1995
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        All Cattle    Annual                      Fat Steer     All Beef 
        Inventory     Calf Crops    Calf Prices   Prices        Prices  
YEAR    (million)     (million)     $/CWT         $/CWT         $/CWT   
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1996    112.0         39.8
1995    113.0         40.3          $73.10        $65.10        $61.80
1994    111.3         40.1          $87.20        $69.40        $66.70
1993    110.6         39.4          $93.90        $72.40        $69.10
1992    109.2         38.9          $86.00        $76.40        $71.80
1991    109.8         38.6          $93.90        $74.30        $70.40
1990    107.9         38.6          $92.80        $80.20        $75.50
1989    107.7         38.8          $88.10        $73.50        $68.70
1988    108.5         39.3          $87.80        $72.60        $67.00
1987    109.5         40.2          $81.40        $67.40        $62.90
1986    112.2         41.2          $62.70        $58.80        $54.40
1985    116.3         41.1          $60.20        $56.60        $52.10
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        TABLE 2.  U.S. CATTLE INVENTORY 1984-1995 (MILLION HEAD)
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        All                     
        Cattle                  Beef                     Steers       Calves
        and         Beef        Replacement   Other      >500         <500  
YEAR    Calves      Cows        Heifers       Heifers    Pounds       Pounds
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1996    112.0       35.6        5.5           8.1        15.4         31.9
1995    113.0       36.1        5.7           8.0        15.4         32.0
1994    111.3       35.6        5.9           7.5        15.2         31.9
1993    110.6       35.4        5.8           7.3        15.2         30.8
1992    109.2       34.5        5.7           7.1        15.1         30.5
1991    109.8       34.5        5.3           7.5        15.2         30.9
1990    107.9       33.9        5.1           7.2        14.6         30.6
1989    107.7       33.8        4.9           7.2        14.4         30.6
1988    108.5       34.0        4.8           7.3        14.5         31.0
1987    109.5       34.0        4.8           7.6        14.8         31.1
1986    112.2       34.1        4.8           8.0        15.3         32.1
1985    116.3       35.3        4.9           8.3        15.9         33.6
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