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Economist says it’s still a good time for risk management

A livestock economist says improved drought conditions could set the stage for expansion in the cattle industry. University of Missouri’s Scott Brown says rain has been important. “The ability to get some forage supplies in reserve is more likely than it looked a few months earlier,” he says. “Does that trigger expansion?”

He tells Brownfield cattle prices are still at or near record-high levels, and risk management will be critical in the coming months. “The first time I believe that markets feel like expansion is starting to happen, I know what’s going to happen to cattle prices,” he says. “Knowing when markets think expansion is clearly underway, I think that’s what we don’t know.”

But Brown says producers don’t want a repeat of 2014/2015. “Because I remember telling producers, hey, this is going to last for a while, like it’s a good period of time,” he says.  “Yet we had rebuild happen so quickly that it took a lot of shine out of those cattle prices. That could happen again.”

He says without the July Cattle Inventory report, industry analysts and producers will have to monitor multiple different data points to look for signs of herd expansion.  One of those is the beef cow slaughter numbers found in USDA’s Livestock Slaughter report which comes out Thursday.

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