The latest U.S. Department of Agriculture cattle inventory report shows an increase of the U.S. beef cowherd population to 30.33 million head. That’s an increase of one million head over one year ago. But USDA also reduced the cow number of January 1, 2015 by 400,000 head from 29.7 million head down to 29.3 million head. USDA showed a million head increase in 2015, but a smaller increase in 2014. CattleFax Chief Executive Officer Randy Blach said getting that number above 30 million head is a step in the right direction.
“I don’t think we would have had an industry that would have dropped the number of beef cows much below 31 and a half to 32 million head had it not been for the magnitude of the drought,” Blach said.
A year ago, Blach thought the industry could handle those levels as long as demand stayed close to current levels. He said there could be a two to three million head increase in the number of beef cows through this expansion phase. He is comfortable in getting back close to 32 million head, but one unknown is the shaky global environment.
“That will pass too,” Blach said. “You know all these markets correct. All markets correct and this is what we are seeing around the world.”
In coming out of 2014, life couldn’t get any better with record cattle prices. Blach said the market went from euphoria to panic and fear when the cattle market crashed in the second half of 2015. He said hopefully we were reminded that we make money at the point where we buy cattle, not where we sell cattle.
“That would be the physiological move that you go through in markets from peaks and valleys,” Blach said. “There’s great opportunities in our business and our industry, but we’ve got to be business like."
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