A smaller beef herd reported in USDA’s Jan. 1 cattle inventory estimates provided the cattle markets with even more bullish news.

Beef cow numbers continue to fall as producers seem to want out of the business. The continued decline is related to multi-year financial discouragement due to high and volatile feed prices, shortages of pastures in some areas last summer, and developing dry conditions in the Southeast and the central and southern plains. Beef cow numbers at 30.9 million head are down two percent over the past year and down six percent since 2005.

Regionally, the largest decline in beef cows was in the western Corn Belt where numbers declined by 168,000 head in the past year. This decline was led by Missouri with 103,000 fewer head and Iowa with a 45,000 head reduction. The southern plains had a reduction of 166,000 head, led by Texas with 115,000 fewer head. The Southeastern region had the third largest decline with a reduction of 121,000 head.

In the eastern Corn Belt, beef cow numbers declined by 35,000, led by a reduction of 37,000 cows in Illinois. Illinois has had a 24 percent decline in beef cow numbers since 2005. The only area of increase was the northern and central plains as cow numbers continue to concentrate somewhat more in the center of the country.

Producers are planning to continue to reduce numbers even further. The number of beef heifers being retained for breeding purposes is down five percent. This means that beef cow numbers should continue to drop at least into the USDA July inventory report. The expected 2011 calf crop should be about 35.3 million head, down 1 percent as well.