Table 1. Cattle and Calves: Number by Class and Calf Crop: Million Head¹

Class	1996	1997	1998	1998 as % of 1997
	- 1000 Head -			percent
Cattle and calves	103,487	101,460	99,501	98
Cows and heifers that have calved	44,644	43,580	42,874	98
Beef cows	35,228	34,271	33,683	98
Milk cows	9,416	9,309	9,191	99
Heifers 500 pounds and over	20,232	20,311	19,746	97
For beef cow replacement	6,179	6,056	5,745	95
For milk cow replacement	4,104	4,057	3,982	98
Other heifers	9,949	10,199	10,018	98
Steers 500 pounds and over	17,463	17,320	17,197	99
Bulls 500 pounds and over	2,390	2,339	2,266	97
Calves under 500 pounds	18,369	17,909	17,418	97
	1995	1996	1997	1997 as % of 1996
Calf crop	40,211	39,776	38,718	97

¹ U.S.D.A. January 1, 1998 Cattle Inventory



This decrease in cattle numbers should have a beneficial impact on cattle prices this year and for the next several years. Three factors carry the greatest weight in determining calf price; the price of fed cattle, the price of corn and the number of animals (inventory) in the marketplace. All three of these factors, will point toward better times in the beef industry in 1998.

The inventory estimates indicate a smaller beef supply is coming from a reduced 1997 cow herd and calf crop. These numbers also suggest that beef supplies will be lower in 1999 and beyond. The number of beef cows on U.S. farms and ranches on January 1, 1998 was estimated to be 33.7 million head, down 2% from the 1997 January 1 estimate.

The number of beef replacement heifers ready to enter the cowherd is also estimated to be lower. Beef heifer replacements are estimated to be 5.75 million head, 5% and 7% below 1997 and 1996 January estimates, respectively. Heifer statistics are important in anticipating cow herd expansion potential. This estimate suggests that producers continued to downsize the cow herd in 1997.

The reduction in beef cow numbers and lower heifer retention estimates means that the profits were still tight. In 1997, beef producers continued to reduce their cowherds in an effort to turn the cattle cycle around and get the industry back to profitable levels. It worked. This is great news for Carolina beef producers. Their efforts have certainly helped. In 1998, profits to the cow-calf segment should return. As the saying goes, "the best cure for low beef prices is low beef prices."

The estimate for cattle and calves on feed for slaughter is up 3 %. This indicates that cattle producers placed a large number of calves on feed in 1997. These numbers reflect the large 1996 calf crop and an increase in heifer numbers placed on feed and not retained in the cow herd.

The steer inventory estimate indicates that steer numbers peaked in 1996. The inventory class of steers weighing 500 pounds and over is estimated at 1% below the 1997 number. The class of "calves under 500 pounds" is 3 % below last years' level. These estimates suggest that the number of animals being fed in 1998 will be below 1997 levels.

The 1997 calf crop estimates also support the evidence that the beef supply will be smaller throughout the rest of the decade. The total calf crop estimate for January 1, 1997 is 38.7 million head, down 3% from 1996.

BEEF COW ESTIMATES BY AREA OF THE COUNTRY

The U.S. beef cow herd decreased about 2% in 1997. Southern states beef cow numbers decreased by 6.03 percent. This is a significantly larger decrease than the U.S. average. Cow numbers declined by over 5% in North Carolina (-7.23). States with declines greater than 3%, but less than 5%, are: Arkansas (-4.08) and Florida (-3.99). Those states with losses between 1 % and 3 % are: Alabama (-1.99), Georgia (-2.60), Kentucky (-1.72), Louisiana (-0.37), Mississippi (-2.35), South Carolina (-1.61), Texas (-1.10), and Virginia (-2.70). Oklahoma and Tennessee reported no change in beef cow numbers during 1997 (Table 2).

BEEF HEIFER REPLACEMENTS BY AREA OF THE COUNTRY

Replacement heifer estimates for the U.S. were estimated at 5.75 million head. This is a 5% decline from 1997 estimates. Southern cattle producers indicated that their retention level was down 8.38 percent over 1997 numbers. Texas (-19.23%), Mississippi (-12.75%), Arkansas (-10.53), Kentucky (-21.05), North Carolina (-15.93), and Texas (-11.36) lead southern states in the percentage decline in beef heifer replacements. All other southern states indicate lower beef heifer replacement retentions with the exception of Oklahoma, which indicated no change over last year. In total the southern states indicated about 3 percent less heifer to be used as beef cow replacements in 1998, compared to the U.S. average.

Table 2. Beef Cow and Replacement Heifers Inventory Numbers by Selected States.

	Beef Cows (1,000 Hd.)				Replacement Heifers (1,000 Hd.)
State	1997	1998	% Change		1997	1998	% Change
Southern States
Alabama	829	822	- 1.99		138	127	-7.97
Arkansas	954	915	- 4.08		190	170	- 10.53
Florida	1,052	1,010	- 3.99		155	145	- 6.45
Georgia	692	674	- 2.60		118	110	- 6.78
Kentucky	1,160	1,140	- 1.72		190	150	- 21.05
Louisiana	547	549	- 0.37		93	86	- 7.53
Mississippi	682	666	- 2.35		130	125	-3.85
North Carolina	512	475	- 7.23		113	95	- 15.93
Oklahoma	1,965	1,965	- 0.00		360	360	- 0.00
South Carolina	249	245	- 1.61		47	46	- 2.13
Tennessee	1,085	1,085	- 0.00		200	200	-0.00
Texas	5,460	5,520	- 1.10		880	780	- 11.36
Virginia	740	720	- 2.70		130	120	- 7.69
Total Southern States	15,927	14,966	- 6.03		2,744		- 8.38
Total U.S.	34,271	33,683	- 1.72		6,056	5,745	- 5.14

NUMBER OF BEEF COW OPERATIONS IN THE U.S.

The number of operations with beef cattle in 1997 totaled 1,167,910, down 2% from 1996, and 4% from 1995 estimates. Across the southern region, the number of operations with cattle and calves decreased by 6,000 farms in 1997. Five southern states: Alabama, Georgia, Kentucky, Mississippi and Tennessee indicated declining numbers of beef cattle operations in their states. Florida and Virginia indicated a net gain in beef farm numbers. The remaining southern states indicated no change in the number of beef operations in 1996.



SUMMARY

The January 1, 1998, cattle inventory is good news for South Carolina and U.S. cattle producers. Beef inventories have declined signaling the industry is on the rebound. Better times are ahead for 1998 and beyond.

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updated 2/26/98