Thursday, February 07, 2008

Cattle market may no longer be cyclical, bank says

For those of us who grew up raising cattle, there was one overarching rule of the business: Sometimes it was up, sometimes it was down. The cattle market ran in cycles. Perhaps no more.

"The days of fairly predictable cycles could be over, agribusiness financial services provider Rabobank said in a report on the U.S. beef industry," writes Janie Gabbett for Meatingplace, a magazine for the red-meat industry.

"The report noted that the last identifiable cycle for the U.S. beef cow herd occurred between 1981 and 1995," Gabbett writes. "Since then, the beef cow herd has been declining, even as more beef has been produced through increased slaughter weights." The report said, "It is now possible to argue that the traditional cattle cycle may have been permanently replaced. It would appear that significant changes in the beef cow herd during the cattle cycle are a trend of the past."

Supporting those observations is Rabobank's prediction that "The U.S cattle inventory will likely remain flat through the end of the decade." (Read more)

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