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Cow herd changes

HAY MAKER

Well-known member
Cow herd changes, impacts slow to start, slow to stop
Friday, July 18, 2008, 4:24 PM

by Peter Shinn

USDA's Economic Research Service on Friday issued its monthly Livestock, Dairy and Poultry Outlook. In it, USDA confirmed continued liquidation of the U.S. beef cow herd.

Jim Robb, Director of the Livestock Marketing Information Center in Lakewood, Colorado, told Brownfield he expects USDA's mid-year Cattle Inventory on July 25th to show a 1% year-over-year decline in the U.S. beef cow herd, as economically challenged ranchers continue to slowly sell-off their stock in the face of prohibitive fuel and feed costs. And according to Robb, the same thing is happening all around the globe.

"The U.S. total cattle and calf herd is shrinking. The dairy cow herd is still above a year ago. The beef cow herd is shrinking. The Canadian cow herd is shrinking," Robb said. "And then if we want to extrapolate that to around the world, the Australian cow herd is shrinking. The South American cow herds on aggregate are shrinking and the European cow herd is shrinking, so this is not just a domestic phenomenon."

Robb emphasized reducing the size of the beef cow herd is a multi-year process. And he also pointed out, while beef supplies will tighten, demand will likely increase, especially if exports continue to expand as much as he and USDA think they will. Indeed, USDA in its Outlook report Friday projected beef exports will grow by 19% this year and another 11% next year.

Beef prices in grocery stores have already gone up. And prices for finished cattle are at levels not seen since the pre-BSE days of late 2003. According to Robb, those prices are only going to continue increase, and for years to come.

"For slaughter-ready animals and at the meat case we'll see record-high prices," Robb predicted. "We already have record-high prices in some categories. And they will continue to go high at least through 2010, and for beef, probably longer."

But that doesn't mean the ranchers producing beef animals will see a big price jump. Robb said cow-calf producers can except continued pressure on the prices they receive, except if corn prices fall by two dollars a bushel or more from current levels.
 
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