U.S. beef producers as a group seem bent on getting out of the business at least in the short term, says Chris Hurt, Purdue University Extension ag economist.

There were 30.9 million beef cows in the U.S. as of Jan. 1 of this year, down 2% from the year-ago figure and 6% since 2005, according to Hurt. More telling, he points out, is that the number of heifers being retained for breeding purposes is down 5% compared to the Jan. 1, 2010, number. That indicates that total cattle numbers will continue to drop at least through the first half of this year. He expects the 2011 calf crop should be about 35.3 million head, down 1%.

A variety of factors – multi-year financial discouragement due to high and volatile feed prices, shortages of pasture in some areas last summer and developing dry conditions in the Southeast and Central and Southern Plains – go a long way in explaining the numbers reductions, Hurt says. Needed to turn things around are a return to profitability and more abundant forage and feed supplies.

Weather in 2011 and 2012 will probably be the deciding factor determining when the beef cattle industry will shift from liquidation to expansion, he says. “Favorable weather that provides above-trend corn, soybean and wheat crops, along with abundant forages, could shift the industry into expansion by 2012.” The resulting “much lower feed prices” would provide strong financial incentives for producers to expand brood cow numbers.

More normal or trend crop yields, on the other hand, would most likely lead to modestly lower feed prices. That could cause calf prices to rise proportionally next fall, providing some financial incentives to expand brood cow numbers. However, below-trend crop yields and shortages of forages would keep the industry in a state of contraction well into 2012.