Producers have proven far less responsive to higher prices during the 17-year contraction. Despite some relatively favorable years in the middle of that run, cow-calf operators didn’t keep back heifers and/or reduce culling rates in the typical fashion of previous 10-year cattle cycles. That’s highlighted in the graph above. Clearly, drought has played a major role in recent years.

Secondly, changes in the business environment, including higher feed and overall operating costs, have impacted longer-term decision making (return/cow is almost equal to the previous 11 years).

Third, access to capital has also influenced the decline in cow numbers.

And, finally, there’s also the consideration of producer demographics and long-term risk/reward considerations when making investment into replacement heifers and/or cows.