Don Close with Rabo Agrifinance Talks Currrent Cattle Inventory NumbersMon, 10 Feb 2020 14:38:39 CST
Are the latest cattle inventory numbers from the USDA square with 2019 figures? In today’s Beef Buzz we discuss that issue with Don Close, Rabo AgriFinance senior analyst for food and agribusiness.
There are probably more cattle and calves on our nation’s farms and ranches than the latest USDA figures would indicate, Close said.
He noted that throughout 2019, USDA’s week-to-week numbers would indicate we had radically stopped cow herd expansion.
“I think the USDA over estimated our cow herds in both 2017 and 2018 and inflated that anticipated view of cattle outside of feed yards,” said Close. “We are still unraveling those numbers and will eventually get back to equilibrium.”
Close said the big unknown for 2020 will be the drought prospects in the southwest this summer.
“This will be a huge indication of just how much of a reduction we see in the cow numbers,” said Close.
Is the current estimate of 31 million head of cattle make sense for the industry right now?
Close said to fit in with the 9-year cattle cycle, he would expect to see even more cow herd liquidation than the USDA numbers would indicate.
“I think what this confirms is that we’ve stopped expanding and started contraction. It will probably take us through 2020 of liquidating cows and that puts us in a good spot for 2021 and 2022 to started rebuilding again.”
Close said with 31 million head base to start the process, this bodes well for profitability going into the next cycle.
Couple this with strong domestic and global demand, this sets up for a good run for cattle producers, said Close.
Trade issues could temper the optimism but that is still an unknown as the world deals with the corona virus outbreak and attempts by China to restart their importing of American ag products.
Click on the LISTEN BAR below to hear the complete interview with Don Close as he talks With Ron Hays.
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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