U.S. Cattle Herd Contraction is Slowing

The recent Cattle on Feed Report was called neutral-to-slightly-positive by American Farm Bureau economist Bernt Nelson.  He said the overall rate of contraction in the U.S. cattle herd has slowed.  However, factors like demand, beef prices, and trade, among other factors, will influence producers’ decisions about what to do with their animals.

“Cash prices for fed steers recently hit record highs,” Nelson said. “While that’s good for sellers, it’s important to remember that they create obstacles for cattle buyers and can be a barrier for farmers who want to expand their herds.”

He also said this isn’t a typical cattle cycle where high prices lead to growth in the U.S. herd.  High cattle prices combined with the unpredictability of future prices and profitability could compel farmers to continue marketing a higher percentage of females for beef rather than breeding, which could continue the current contraction cycle.

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