When Will The Cattle Herd Rebuilding Start?
A topic of conversation, both formally and informally, at those meetings was what has happened to the traditional cattle cycle and when will beef herd rebuilding begin. The following comments are points from some of those discussions and come from many different sources.
The traditional supply driven, approximate 10-year cattle cycle usually included 6 to 8 years of increasing numbers followed by 3 to 4 years of liquidation. However, in the past decade beef cow numbers only increased in 2005 and 2006. And, on July 23, the Friday before all the meetings, USDA National Agricultural Statistics Service (NASS) released the semi-annual cattle inventory report. NASS reported beef cows and heifers that have calved 31.7 million head on July 1, down 500,000 head from last year. The
Of course, the past decade was marred with a variety of unexpected events, some catastrophic, that forced cattle producers to crisis manage from one event to the next. Some of these events include starting the decade with the 9-11-2001 terrorist attack and subsequent decline in beef demand and prices. Then the discovery of BSE in Canada and the U.S. in 2003 followed with major disruptions in international beef trade. Major droughts in several important cattle regions also materialized. Corn-based ethanol for fuel increased from the mid-decade on which caused increased demand for corn and increasing and volatile feed grain prices. 2008 saw an extreme escalation of
Other points brought up included the increasing average age of cow-calf producers, the relatively large number of small farms/ranches with cattle, historically high cull cow and bull prices, loss of pasture and range to crops and other uses, more cautious lending practices, and severe winter weather in the Northern Plains the last two years and throughout the country last year. There are other reasons as well, but with all the uncertainty and volatility in prices it is no wonder why producers have been reluctant to increase beef herds.
Will the next decade be different? No one knows that answer but there are some encouraging signs in 2010. Although there are a few dry pockets, many cattle producing regions in the U.S. are experiencing the best pasture and range conditions in the past decade. The export demand for beef is improving with U.S. beef sales up about 25 percent from last year. The domestic economy is still struggling but improvement should take place in the next few years. Cow, bull and feeder cattle prices have improved and