Hi Everyone:
I noted Kpb's comments about a cow cycle in another thread. You have to admire Kpb's determination.
Although we have been blessed with more than our fair share of moisture this fall, the fact of the matter is that others have not been so lucky. At this very moment there is a very severe drought in the cattle producing regions of the United States as well as Australia. The people who forecast such things in the U.S. are already adjusting their forecasts regarding the size of the U.S. cattle herd in the upcoming years as a result of the present drought.
I recall reading somewhere a comment by an old rancher that the only reason a cow producer will reduce his/her herd size is drought, not price. I would suggest that the cycle, if there is one, is more closely related to cycles in weather than anything else.
I would put it to you that if the cow cycle did exist and if we were to assume the cow cycle was related to prices that we would see an relationship between price and calf numbers that was the opposite to what we are led to believe would happen. That is when calf prices fall, calf numbers would tend to increase as producers need to keep more calves to pay their bills, not fewer calves.
Given the realities in our market, packer monopolies, government control over non NAFTA imports, flucuating grain prices, competing meats, consumer spending preferences not to mention BSE that it seems pretty far fetched to lay the blame on falling calf prices on too many calves. The notion of a cow cycle always has been a smoke screen that covers up a host of ills in the industry that those in control would rather not deal with.
That said, drought will change herd size very quickly. Price will not or at least only very slowly over a generation or more. If there is a cycle it is more likely related to what goes in the rain guage than the price of calves.
I noted Kpb's comments about a cow cycle in another thread. You have to admire Kpb's determination.
Although we have been blessed with more than our fair share of moisture this fall, the fact of the matter is that others have not been so lucky. At this very moment there is a very severe drought in the cattle producing regions of the United States as well as Australia. The people who forecast such things in the U.S. are already adjusting their forecasts regarding the size of the U.S. cattle herd in the upcoming years as a result of the present drought.
I recall reading somewhere a comment by an old rancher that the only reason a cow producer will reduce his/her herd size is drought, not price. I would suggest that the cycle, if there is one, is more closely related to cycles in weather than anything else.
I would put it to you that if the cow cycle did exist and if we were to assume the cow cycle was related to prices that we would see an relationship between price and calf numbers that was the opposite to what we are led to believe would happen. That is when calf prices fall, calf numbers would tend to increase as producers need to keep more calves to pay their bills, not fewer calves.
Given the realities in our market, packer monopolies, government control over non NAFTA imports, flucuating grain prices, competing meats, consumer spending preferences not to mention BSE that it seems pretty far fetched to lay the blame on falling calf prices on too many calves. The notion of a cow cycle always has been a smoke screen that covers up a host of ills in the industry that those in control would rather not deal with.
That said, drought will change herd size very quickly. Price will not or at least only very slowly over a generation or more. If there is a cycle it is more likely related to what goes in the rain guage than the price of calves.
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