Inventory

The latest <a href="http://www.cattlenetwork.com/content.asp?contentid=3779" target="_new">cattle inventory numbers</a> for the US are out. They show the herd size bottomed out last year and is showing small gains in numbers this year.<br />n<br />n<blockquote>Total cattle inventories on January 1, 2005 were 95.8 million head, up one percent from 2004. This is still the lowest total U.S. cattle inventory since 1960. </blockquote><br />n<br />nHeifer retention is also showing solid signs of taking hold so down the road a few years the cattle numbers will be up and herd expansion will be underway.<br />n<br />n<blockquote>Heifer retention is indicated by a four percent increase in beef replacement heifers from a year earlier. This follows a similar four percent increase in beef replacement heifers in July of 2004 and suggests that herd expansion is firmly underway in the U.S.</blockquote><br />n<br />nYou might ask why this information matters? Simple law of supply and demand. Once the herd builds back up beef prices for the producer and consumer will go down. Good news for consumers, bad news for us producers. Don't except these things to happen overnight though. Cattle only have one calf a year and take two years to get in production. This is a long cycle for the cattle numbers to come up to make a large difference in price. <br />n<br />nThis is interesting information to know. It gives me a time frame for when cattle prices are going to plummet again so then I know when debt will grow larger. I can make slight adjustments to the operation in expectations for it but most of it you just have to weather. Boom and bust cattle cycles, they will never end.<br />n<br />n<b>I have never yet seen any plan which has not been mended by the observations of those who were much inferior in understanding to the person who took the lead in the business. Edmund Burke</b>