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CattleFax analysis points to another year of expansion

Several factors indicate the U.S. cattle herd will continue to expand in 2019.

CattleFax analyst Kevin Good says weather conditions and profitability drive expansion.

“The cow/calf producer has generally been profitable over the last five years, and Mother Nature has generally smiled on us.”

During a presentation at the Cattle Industry Convention in New Orleans last week, Good described how areas impacted by drought a year ago are in much better shape today.

He says slaughter was up 400,000 head in 2018, pressuring the cull cow market.

“And we forecast we’ll harvest an additional 150,000 cows this year.”

And Good suggests the heifer retention number indicates another year of growth.

“When it’s below 36 percent, you’re still expanding. By the time you get to 37 percent and above, you’re liquidating. We would suggest in 2019 we’re going to be somewhere in that sweet spot between 36 and 37 (percent).”

Good says restocking is anticipated, especially in Texas where dryness forced some ranchers to liquidate.

The USDA should provide a clearer picture of U.S. cattle inventory when estimates that were delayed in January are released February 28^th barring another government shutdown.