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US Cattle Inventory Continues to Build

As the nation’s cattle inventory continues its expansion, consumer demand is increasing at a steady clip, according to experts speaking at the Texas and Southwestern Cattle Raisers Association Convention in Fort Worth.

For Texas producers, the year is off to a good start with above-average rainfall and green forage on pastures for grazing.

“We are wet,” said Randy Blach, CEO of CattleFax, looking at a U.S. drought map during his CattleFax beef outlook presentation. “There’s not much red on the map.”

Blach said the El Nino pattern is expected to continue after the second wettest winter since 1980 for the cattle-feeding industry. Expansion continues for the nation’s beef cattle producers. Since the mid-1970s, the U.S. beef inventory has grown to about 132 million cattle.

Looking ahead to the cattle market prices, Blach said spot corn futures prices are $3.75 a bushel to $4 per bushel. He said with spring coming later this year, that will mean more cattle turned out later for grazing, which will mean more cattle brought to market late in the year. That will be reflected in prices going into the fall.

For cow-calf producers, Blach said there has been a good run with prices this year, but they are not going to be as good as 2014. The average per-head profitability for cow-calf producers is $100 to $150, he said.

Blach said this is not the stage of cattle cycle to take any significant risk with record pork and poultry production along with beef.

“Cattle prices are top of mind for most, especially cull cow prices,” said Dr. Joe Paschal, Texas A&M AgriLife Extension Service livestock specialist, Corpus Christi.

Paschal and Dr. Tom Hairgrove, AgriLife Extension specialist in College Station, were on hand to lead a calving demonstration at the Fort Worth Convention Center.

Paschal said cattle producers in South Texas were positive after the recent STX Beef Co. acquisition of Kane Beef processing plant in Corpus Christi.

“Almost everyone knows how important that plant is to the cow business around there, whether you feed cattle or not,” Paschal said. “Lack of hay and too much moisture concerned a lot of folks up the coast. They got plenty of rain late summer and fall and had little or no hay to winter on. The next thing is what will be going on long-term in the cattle market since the gurus think the herd is beginning to stabilize. Beef production will continue to increase for at least two more years, and what effect will that have on price?”