The cattle market the last two years is like August weather in Texas. Red hot!
More than 1,680 beef cattle producers gathered at Texas A&M to hear the latest about the cattle market and future trends at the 61st Texas A&M Beef Cattle Short Course, held this week in College Station.
“I think there is a lot to look forward to down the road,” said Dr. Jason Cleere, conference coordinator and Texas A&M AgriLife beef cattle specialist.
Dr. Derrell Peel, Oklahoma State University livestock marketing economist, said the cattle market may have topped earlier this year, but don’t expect a downward spiral in prices anytime soon. However, Peel said to “prepare for lower prices” according to decades of past charts and data.
“It’s been fun on the way up; it’s been easy to make money on the way up,” Peel said. “There still will be some good times ahead, but you’re going to have to manage costs in relation to the market. It all goes back to cost management. Now is a good time to invest some of those good returns you’ve had to help manage costs over the next few years. That might be investing in (replacement) females or brush control. I’m still optimistic. The best cure for high prices is high prices.”
According to the latest U.S. Drought Monitor, Peel said, drought conditions have improved dramatically and beef producers “have been able to switch from defense to offense” in building back herds.
“We are on the way back to seeing expansion,” Peel said.
U.S. cattle inventory was up 2.5 percent as of July 1, according to the U.S. Department of Agriculture-National Agricultural Statistics Service. Beef cow numbers totaled 30.5 million July 1 as compared to 29.7 million in 2014.
Other indicators include a 6.9 percent decline in cattle slaughter so far for 2015 as well as an 11.5 percent decline in heifer slaughter.
“That’s pretty strong evidence we are expanding,” Peel said.