Kevin Good With Cattlefax Makes Case For Cow Herd Expansion Now Underway

The cattle industry is transitioning from the liquidation phase to the expansion phase in terms of cattle numbers, according to Kevin Good, senior market analyst for CattleFax.  When combined with a very robust domestic and global demand for beef, it helps point to a rosy picture for the industry. Good made the remarks during a general session of the 2014 Cattle Industry Summer Conferences in Denver August 1. The conference will run through Aug 2.
 
“It’s one for the ages,” Good said, referring to the cattle market. “It’s been a tremendous change from a year ago.”

Good said the industry is accelerating the rate of expansion, and “it’s a great opportunity to take advantage of the trend.” However, while the fundamentals are “friendly,” he said, “the market will have a correction.” And that correction could be soon. “Something needs to give,” he said. “You have to be prepared for that ceiling,” he told the hundreds of cattle producers in attendance. Farm Director Ron Hays was there for Good's presentation- and has a special audio feature of Good's comments about beef cow herd expansion- both from the cow side of things as well as heifer retention. Click on the LISTEN BAR below to hear Good's complete comments on expansion of the US cow herd.

Good said a “perfect storm” was in place for the industry in terms of profitability. There’s a tighter animal supply in general, with the PED Virus in the pork industry and hatchability and genetic issues in the poultry industry keeping pork and chicken supplies in check. With all animal protein supplies stable and prices increasing, beef is not that far out of line, he said.

Good said calves in 2014 are averaging $2.40 cwt., while feeder cattle are $2 and fed cattle $1.50. He said CattleFax expects prices should be stronger again on average in 2015, but larger supplies of beef by 2016 and larger total meat supplies will limit prices by then.

Lowering corn prices are giving the industry some relief. They are the lowest since 2010, and are expected to average in the $4 per bushel range, and possibly in the upper $3s, for the year. Production in 2014 is expected to be in the 14 billion bushel range, he said.