Rabo's Don Close Expects to See Year-Over-Year Increase in US Cow Herd Number Come January 1Wed, 11 Oct 2017 10:50:29 CDT
During the Texas Cattle Feeders Association Convention held at the beginning of this week, Radio Oklahoma Ag Network Farm Director Ron Hays had the chance to speak with Don Close, cattle market watcher for Rabo AgriFinance, about where the industry stands when it comes to the US beef cow herd. According to him, the nation’s herd continues to grow as 2017 approaches its end, and he says, too, that price opportunities appear favorable for the coming year as well.
“All of our long-range work really suggests to us that we’re still expanding numbers,” Close said, clarifying that there has been more displacement of cattle in the West where fires have raged rather than actual liquidation. “Our data implies we’re still expanding, although at a substantially slower pace than what we did any of the previous three years.”
Close says he fully expects the January 1, 2018 numbers to be larger year-over-year, but admits that the displacement of cattle from the multiple natural disasters that have occurred this year, have indeed created a cloud of uncertainty. The good news cow/calf producers can count on though, is that calf prices have been notably stronger this year compared to last. He believes calves currently are a good value and says cow/calf producers have recognized the more attractive price at which calves are currently trading. But he adds also, that calves are selling at a price level that provides a reasonable profit opportunity for cattle feeders who are taking advantage of an inverted basis and the strength in deferred live cattle contracts. Looking ahead, while no official projections have been made just yet, Close says he sees continued profitably in during the first of the year.
“Right now, I think we’re ok,” he said. “For late first, early second quarter - a spring high - I’m kind of thinking that mid $1.20 - $1.30 for a fed steer price. Clearly, with the majority of the cattle that are on feed today, we’ll still see some very solid profit opportunities.”
Listen to Don Close of Rabo AgriFinance and Ron Hays discuss the ongoing expansion of the US cow herd, and what producers can expect to see in the cattle markets for early next year, on today’s Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is 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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