It appears that herd expansion has slowed down as beef production forecasts have been lowered by analysts at USDA.
The latest World Agricultural Supply and Demand Estimates (WASDE) report by USDA projects beef production to be lower than originally estimated. Reasons for the change include lower than expected fourth-quarter fed cattle slaughter paired wither lighter carcass weights. There are also more cows in the slaughter mix than anticipated, signs that herd expansion is reaching a peak for beef producers.
Derrell Peel, economist at Oklahoma State University, believes that some slight herd expansion could continue into 2019 or 2020, but it will only be fractionally higher than where numbers are at now.
“We’re holding at price plateaus that are marginally favorable and it wouldn’t take a lot for producers to expand a little more,” Peel says.
Peel adds if domestic demand or export markets continue to make gains there might be incentive for additional cattle in the beef herd.
USDA projects beef exports to remain unchanged from the previous month while imports were lowered.
Prices forecasts by USDA were raised for cattle during the fourth-quarter while the 2019 WASDE prices show no movement.
For more on the report and what Peel sees for cattle going forward watch the video above from AgDay.