Drought and high input costs have resulted in historically low numbers of cattle and calves, according to the U.S. Department of Agriculture’s cattle inventory.

The number of all cattle and calves in the United States on Jan. 1 was 87.2 million head, the lowest Jan. 1 inventory since USDA’s 82.08 million estimate in 1951. For beef cattle, the figure was 28.2 million head, the smallest U.S. beef herd since 1951.

However, noted Dr. Todd Davis, Indiana Farm Bureau chief economist, changes in the industry since the 1950s – including changes in genetics that produce larger animals combined with better knowledge of nutrition – make such comparisons a little tricky.

“Live animal weight has increased by over 400 pounds per animal since the 1950s,” Davis said. “We’re getting more meat from fewer animals.”

In contrast to the national figures, at 790,000 head, Indiana’s cattle and calf inventory was unchanged from last year, said Nathanial Warenski, state statistician for the Indiana field office of the USDA’s National Agricultural Statistics Service. Beef cow numbers increased 1% to 180,000 head, and beef replacement heifers increased 7% to 32,000 head. Milk cows, replacement heifers and calves also increased in Indiana.

According to Davis, the smaller cattle herd may provide some opportunities for Indiana producers.

“If the drought lessens in Texas and Oklahoma, Indiana feeder calves could be put on winter wheat pasture over the winter and then placed into a feed lot,” he said.

Interest rates are another factor curbing herd expansion.  For example, Davis said, the Chicago Federal Reserve Bank reports the interest rate on operating loans in 2021 was about 4.4%, and now it’s closer to 8.5%. The cost of borrowed money increases the cost of purchasing breeding livestock, financing operating costs and financing any new equipment needed in the operation. Increases in all these costs may limit expansion.

Consumers hoping to see lower prices for steaks and hamburger in the meat case for this summer’s grilling season will not see relief until fed cattle production increases. Given the biological lag involved in increasing the cow herd, relief will be at least a couple of years away.

“Consumers would like to see cheaper beef. More competitively priced substitutes like pork and chicken will be added to the grill to stretch the food dollar,” Davis added.