When will U.S. beef herd sell-off end?
Beef Outlook: Farmers continue to liquidate the cow herd; is now the time to expand your operation?
Scott Brown, Beef Magazine
Aug 01, 2022
Brown is a livestock economist with the University of Missouri.
The July cattle report from USDA largely met analyst expectations, confirming further liquidation in the U.S. beef cow herd.
Beef cow numbers for July 1 came in at 30.35 million head, 2.4% below one year ago and down 6.3% versus the recent July inventory peak in 2018.
Although no two cattle cycles are the same, the inventory reduction that is currently being experienced is quite similar in magnitude to the initial liquidation phase of the previous three cattle cycles.
And if the cycles of the recent past continue to be a guide for how this one will play out, we have a way to go in terms of time and declines before the situation reverses.
Past points to future
In the previous three cycles, the beef cow inventory fell an average of 7.1% after this many periods of liquidation, with the largest decline of 12% occurring in the early to mid-1980s. It was followed by more modest declines in the late 1990s (5.4%) and the late 2000s (3.9%).
The duration of the liquidation phase of the previous three cycles lasted for eight or nine years, although there were a couple of observations of modest growth in years six and seven of the 1980s cycle before declines resumed. If you use previous cycles as a gauge, the beef cattle industry is near the halfway point of liquidation.
In the 1980s and 1990s, nearly 60% of the cyclical herd liquidation took place by this point in the cycle, but in the most recently completed downturn, about two-thirds of the liquidation occurred after the point that we find ourselves in today. USDA did not publish a July cattle report in 2013.
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