Tablerock Ranch eastern Wa | If you derive any significant percentage of your income from beef/beef dairy cattle you would acknowledge that our industry is comprised of perceived historical cycles.
Most of us would simplify the concept as ten-year cycles, from peak cow inventories you fall for approximately two years, you then prices stabilize to a relatively flatline for four or five years, then climb again and repeat the process with retained females the limiting factor as prices go higher. I was surprised to learn some schools of thought show 100-year historic data suggests it may be closer to a 12.3-year cycles as opposed to a ten year. Regardless, this pattern has been consistent for approximately 100 years, Black Swan withstanding. In most of our scope of reference, we have had 3 such events, BSE / Tyson plant fire and the pandemic with shorter gray swan events mixed in.
The US beef cow herd sits at historically low numbers, approximately the same size cowherd as 1951. The US population is 340 million today as compared to 150 million in 1951 but our beef cow numbers are at 1951 levels, interestingly, the amount of beef consumed per year per US citizen has stayed almost unchanged since the early fifty's.
Breeding cattle retention still remains the number one driver of long-term price predictions as exports only represent 12% of US production. With beef cow numbers still at historically low levels and the Dairy contribution at lower levels due to previous low milk prices and extreme culling, coupled with the gutting of the heart of the US cow herd last year in Missouri's drought, any significant recovery leans solely on heifer retention which is a slow and easily predicted event. Latest numbers suggest that heifers joining the spring cow herd in 2025 will be far below numbers needed to signify herd rebuilding, also placement numbers recently out suggest, far less heifers from this most recent calf crop are staying on the farm as replacement's for 2026 This lack of retention defies the normal cattle cycle trends for the second year running.
All that said If you are cow calf the future remains bright overall with periodic chances of Black Swan downturns that cow calf can at most times avoid. If you are a feeder like myself "cow calf and feedlot" you have a greater risk like we faced holding cattle during covid or other short-term catastrophes that finished cattle can't be held through.
There are other variables that added up can affect prices but with this new administration's view on outside competition through trade, imported beef may be less of a factor in the near future.
Pretty dang Rosie picture from my perspective, walking my corn and hay production up a loadout ramp has been a gift from above. Happy new Year ! |
Cattle Cycle... is this time different ?
