Agricultural News
Peel Says Herd Expansion Will Put Pressure on Cattle Prices, But Not Real Soon
Fri, 07 Aug 2015 15:36:28 CDT
Rebuilding the U.S. beef cow herd is a multi-year process. While the process started last year, Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel believes several more years of expansion will be needed. In 2014, there was a two percent increase in the U.S. beef cow herd and the U.S. Department of Agriculture's midyear cattle inventory report showed an increase of two and half percent. Peel said that shows herd expansion is actively underway and he expects the two and half percent increase to continue this fall, but expansion could accelerate even faster.
"I wouldn't be surprised to see a January one number that would imply 2015 beef herd expansion was three percent, perhaps three and a half percent, it could even be a little bit higher than that when it is all said and done, although that would be a big number," Peel said. "But, I think we're going to see pretty aggressive expansion in 2015, probably a pretty healthy pace again in 2016 and by then we maybe getting close to where we need to be and I think we'll begin to moderate that pace of expansion."
Peel is waiting to see a big year for herd expansion in 2015 and 2016, but expects the herd size will get to an ideal level by 2017 into 2018. In looking at prices, Peel anticipates price pressure will build over several months.
"I don't look for it to be a fast or a hard break in this market, certainly not in the rest of 2015, probably not even severely in 2016, certainly not through most of year," Peel said. "By 2017, I think we start to see a little more pressure."
Peel said the downward pressure on prices will be caused by factors unknown at this time, but he will be looking at domestic beef demand and more importantly the international demand for U.S. beef as prices fall. He said a lot will be depending on the exchange rate and those factors could kick in additional demand as U.S. cattle prices moderate. Peel doesn't think that pressure will begin to build too fast or suddenly.
Radio Oklahoma Network Farm Director Ron Hays featured Derrell Peel on the Beef Buzz feature. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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