While trouble in the beef industry continues due to its smallest herd size since 1952, there is potentially some good news down the road. The USDA reported that the number of beef replacement heifers was up 2 percent from a year ago. Analysts on average actually expected the numbers to decline by 0.4 percent.
“It is too early to draw hard and fast conclusions from one data point but this may be an early indication that the cattle herd has the potential to start rising in a couple of years,” wrote J.P.Morgan analyst Ken Goldman in a note to investors.
Goldman called the report “potentially positive long-term for beef packers such as Tyson.” He went on to say, “It is interesting to see beef heifers as a percent of the total beef cow herd at a nearly 20-year high. If this trend continues it would help alleviate some of the lack of cattle supply that packers such as Tyson currently experience.”
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