Turning point for US cattle numbers?

By Georgi Gyton

- Last updated on GMT

Could things be looking up for the US cattle industry?
Could things be looking up for the US cattle industry?

Related tags Cattle Beef Livestock

Delegates at the 2014 Cattle Industry Summer Conference in Denver, Colorado were told that the industry was transitioning from the liquidation phase to the expansion phase in terms of cattle numbers.

Kevin Good, senior market analyst at CattleFax, said that when combined with strong domestic and global demand for beef, the signs were optimistic. "It has been a tremendous change from a year ago,"​ he said.

This will come as welcome news to the US cattle industry, which has faced tight supplies and processing plant closures due to drought in key cattle-producing regions.

Only this month Cargill closed one of its seven US beef harvesting plants, with the jobs of 600 workers plunged into uncertainty.

Good said a "perfect storm"​ was in place for the industry in terms of profitability, and that the rate of expansion, in terms of cattle numbers, was accelerating, but warned that "the market will have a correction". "You have to be prepared for that ceiling,"​ he added.

Calves were averaging $2.40 cwt this year, he said, while feeder cattle were $2 cwt, and fed cattle $1.50 cwt, with CattleFax predicting prices would be even stronger next year. However, increased supply of beef and larger total meat supplies would limit prices by 2016, he said.

Lower corn prices have also been benefiting the industry, while range conditions were looking good, he said. El Niño has been moderately strong, and has been providing relief to much those parts of the country hit by drought. However, the industry is still in the midst of a 20-year drought, he said, so producers should still be cautious about conditions from now until 2017.

"We are living in extraordinary times,"​ Good said. "And prices are going to be continually strong over the next couple of years."

Good was speaking at General Session II on day two of the conference, which included meetings between the National Cattlemen’s Beef Association (NCBA), Cattlemen’s Beef Board, American National CattleWomen and National Cattlemen’s Foundation.

Discussions on currency policy priorities were held by members of the NCBA, which also passed new resolutions and directives for the 2014 Policy Agenda.

Colin Woodall, vice-president of government affairs at the NCBA, said: "Right now, priority issues include the EPA’s proposed waters of the United States rule, tax reform and ongoing international trade issues.

"We are engaged in a lengthy list of policy priorities all year long. After the meetings in Denver, NCBA’s DC staff are headed back to Washington, ready to hit the ground running with the list of recommendations and policy updates."

For example, members of the Property Rights and Environmental Management Committee passed a resolution to "lead the development of a beef sustainability program, inclusive of the beef value chain and stakeholders, that addresses the continued advancement in areas such as economic viability, production efficiencies, animal care and handling, environmental conservation, human resources and community support",​ said the NCBA.

Meanwhile its Cattle Health and Wellbeing committee passed a policy regarding foreign animal diseases, which could cause a widespread quarantine and possible massive depopulation of the US cattle herd, compromising national security and jeopardising the US beef supply. It has therefore passed a resolution to oppose the importation of live cattle, beef and/or products into the US from foreign countries with a history of significant chronic animal diseases, as well as a lack of disease control and eradication measures.

Related topics Meat

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