USDA’s July cattle report met analyst expectations of further liquidation in beef cow numbers. For July 1, beef cow numbers came in at 30.35 million head, a 2.4% decline from one year ago and a 6.3% fall from the July inventory high in 2018. Cattle cycles can offer insight into what numbers can be expected to do in the next year in this situation.
In the previous three cycles, beef cow inventory fell an average of 7.1%, followed by more modest declines in the late 90s and 2000s. Those liquidating periods lasted, on average, for eight to nine years. If using that cycle as a forecast, the current cattle industry is nearing the halfway point of liquidation.
However, no two cattle cycles are the same. Feed availability and other factors unique to each operation will determine whether a producer is set to take advantage of the liquidation market.
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