by Ken Root
Iowa is seen as miles and miles of corn, soybeans, barns full of pigs, chickens, and a few cattle feedlots.
In reality, the cattle industry has a lot of impact on the price of grain as well as the price of pork and poultry.
Today, a livestock Economist analyzes the upcoming Cattle Inventory report that USDA will release on January 31.
Most producers feel the cattle herd expanded in 2016, but the amount of growth could foretell the situation in 2017 for further expansion or slower growth. Many think the herd will top out in 2018 before contracting again.
USDA will release its Cattle Inventory report, illustrating in comprehensive detail, just exactly how large our current cow herd is as of the first of the year.
Radio Oklahoma Ag Network Farm Director Ron Hays reached out to Dr. Derrell Peel, Oklahoma State University livestock market economist, to get his predictions on what the report might reveal about cow herd expansion this past year in 2016, and what clues there might be relative to what could be expected to come this year.
Peel says that without a mid-year report for 2016, the first step is to confirm what we already suspect about last year.
“I think it was an expansionary year – slower than 2015, but I’m expecting at this point we’ll see the beef cow herd, from the beginning of 2016 to the beginning of this year expanded somewhere in the range of 1.5 to 2 percent,” Peel said. “That said, if you look at the way beef cow slaughter and heifer slaughter changed in the second half of 2016, it would certainly suggest that we are putting the brakes on that herd expansion.”
In terms of future expectations for 2017, Dr. Peel says he would not be surprised to see little to no growth, potentially even some liquidation, although he really doesn’t expect that to be the case. He says he will be looking in particular at replacement heifer inventory for clues as to how things may unfold over the coming months. However, Peel hypothesizes that should we see growth in the report, beef cow numbers are likely to start plateauing as we move through 2017.
“If we had an increased herd in 2016 as I expect, then that implies that we continue to see feeder supplies and ultimately beef production grow through at least 2018,” Peel said. “We might be seeing some stability in the herd which would lead them to a plateau in beef production once we got passed that.”