Cow-calf operations are down 4.2 million head since 1996, making it the smallest cowherd since the 1960s, according to Gregg Doud, chief economist for the National Cattlemen's Beef Association (NCBA). Yet, those still in the cattle business are looking at a bright future for 2011.
"Cattle-Fax forecasts a $60/cwt. average cow price for 2011; that’s a pretty healthy cow price. Fat cattle will bring $95-100/cwt. for 2011, with feeder calves bringing $123/cwt., up $6 more than this year. The big wrinkle will be corn prices; if they increase, the feeder calves will be cheaper," says Doud, who spoke at the South Dakota Cattlemen's Association's Convention last week.
He told producers that with cattle prices looking the way they do, there could be real opportunity for producers in 2011; however, it remains to be seen if enough ranchers will be able to take advantage of those opportunities.
“It’s time to retain and rebuild, but will we do it?” asks Doud. “It takes 38% more credit/capital to operate in the current environment. We are going to have to continue to have conversations with our bankers about that. They have a right to be cautious, but we need to be allowed to keep doing business.”
Are you holding tight, expanding or decreasing the size of your cowherd? What do you think about Doud's predictions? What will happen to supply and demand in the upcoming months? Add your two cents in the comments section below.