The U.S. cattle herd appears to be growing. But, it awaits confirmation from government reports that count various sectors, with feedlots and cow numbers being the most relevant. The economic health of the cattle sector as viewed by an official from a major agricultural lender.
Don Close, cattle market watch for Rabo AgriFinance, believes the nation?s cattle herd continues to grow as 2017 comes to a close. Close says price opportunities appear favorable for the upcoming year as well.
?All of our long-range work suggests that we?re still expanding numbers,? Close said. ?Our data implies that we?re still expanding, although at a substantially slower pace than what were in the previous three years.?
Close fully expects the January 1, 2018 numbers to be larger year-over-year, but admits the displacement of cattle from natural disasters has created a cloud of uncertainty. The good news – cow/calf prices have been notably stronger this year compared to last. Close believes calves are of good value and says producers have recognized the more attractive price at which calves are currently trading. Close adds that calves are selling at a price that provides a reasonable profit opportunity for cattle feeders taking advantage of an inverted basis and the strength in deferred live cattle contracts.
While no official projections have been made, Close says he sees continued profitability throughout the first of the year.
?Right now, I think we?re okay,? Close said. ?For late first, early second quarter – a spring high – I?m thinking mid $1.20 – $1.30 for a fed steer. With the majority of cattle on feed today, we?ll still see some very solid profit opportunities.?
