There were no surprises for the cattle market in Friday’s USDA Semiannual Cattle Inventory report, which confirmed that cattlemen continued to liquidate their herds during the first half of 2010.

USDA pegged the all cattle and calves as of July 1 at 98.8% of a year earlier, right on the average of trade estimates that ranged from 98.2% to 99.2%.  At 100.8 million head, the July 1 cattle herd was the smallest in at least 37 years.

The annual calf crop was estimated by USDA at 98.9% of a year earlier compared with trade estimates averaging 98.9% of a year earlier in a range from 98.3-99.8%. The calf crop of 35.4 million head was another new low in USDA records going back 33 years to 1977.

This indicates that feeder cattle supplies will remain very tight during the second half of the year

The supply of cows and heifers that had calved came in at 98.6% of a year earlier, which was also dead on the average of trade expectations. USDA pegged the beef cow herd at 98.4% of a year earlier versus pre-report estimates averaging 98.6% of a year earlier and put the dairy cow herd at 98.9% of a year earlier

USDA also confirmed that despite profitable cattle prices over the past several months, beef cattle producers held back fewer heifers for replacement purposes during the first half of the year. 

The supply of beef replacement heifers was pegged at 97.8% of a year earlier compared with trade estimates averaging 97.9%.

The only mild surprise in Friday’s inventory report was that the number of heifers retained for milk replacement purposes was pegged at 102.5% of a year earlier versus trade estimates averaging 101.1% of a year earlier in a range from 98.7%-101.7%.