Market Advisor | Cowherd Expansion Charts

March 28, 2012

6 Slides

Read the Market Advisor column that corresponds with this gallery here.

Economic theory suggests that when a major input cost goes up, the industry utilizing that input reduces its production. That’s exactly what happened to the beef industry in the biofuels era – high corn prices led to a lower national beef cowherd.

Texas, with 5 million beef cows, drives the U.S. industry. When a severe drought hits Texas, the U.S. cowherd shrinks. The economic reality is that when Texas and the Southern Plains restock, there will be a nationwide economic opportunity for herd expansion. This month, I’ll focus on that expansion potential.

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