US cattle inventory continues to build
By Blair Fannin, Texas A&M University
via Farm Forum (SD) - Apr 8, 2019
FORT WORTH – As the nation’s cattle inventory continues its expansion, consumer demand is increasing at a steady clip, according to experts speaking at the Texas and Southwestern Cattle Raisers Association Convention in Fort Worth.
For Texas producers, the year is off to a good start with above-average rainfall and green forage on pastures for grazing.
“We are wet,” said Randy Blach, CEO of CattleFax, looking at a U.S. drought map during his CattleFax beef outlook presentation. “There’s not much red on the map.”
Blach said the El Nino pattern is expected to continue after the second wettest winter since 1980 for the cattle-feeding industry.
“Weights are a bit lower and prices are reflecting this.”
Expansion continues for the nation’s beef cattle producers. Since the mid-1970s, the U.S. beef inventory has grown to about 132 million cattle.
“We are 40 million head off our peak,” Blach said. “We’ve added about 3 million beef cows, but the whole cattle pipeline got much fuller. Our capacity has been pretty much reached throughout the industry. You are likely as producers to lose a bit of leverage to stocker operators and cattle feeders because we’ve got so much more cattle in our pipeline.
“The bottom line is we are expanding. It takes green grass and profitability to grow the nation’s cow herd. We are still expanding, but at a very slow rate with no new (processing) plants coming online anytime soon.”
“Cattle prices are top of mind for most, especially cull cow prices,” said Joe Paschal, Texas A&M AgriLife Extension Service livestock specialist, Corpus Christi.
Paschal and Tom Hairgrove, AgriLife Extension specialist in College Station, were on hand to lead a calving demonstration at the Fort Worth Convention Center.
Paschal said cattle producers in South Texas were positive after the recent STX Beef Co. acquisition of Kane Beef processing plant in Corpus Christi.
“Almost everyone knows how important that plant is to the cow business around there, whether you feed cattle or not,” Paschal said. “Lack of hay and too much moisture concerned a lot of folks up the coast. They got plenty of rain late summer and fall and had little or no hay to winter on. The next thing is what will be going on long-term in the cattle market since the gurus think the herd is beginning to stabilize. Beef production will continue to increase for at least two more years, and what effect will that have on price?”
Looking ahead to the cattle market prices...