What’s the status of the U.S. cowherd inventory and how is that impacting prices?

Jim Robb with the Livestock Marketing Information Center says fewer heifers are being held, and some cowherd liquidation is also occurring due to drought in California and high fertilizer prices in the Southeast.

As a result, the U.S. cowherd inventory is low. This reduced beef inventory is also occurring on the global scale. Robb says the national inventory of cows in Canada, Mexico, South America, Australia, and Europe are all declining. He says, “The cow herd numbers are tightening worldwide more than most people realize.”

Knowing this, Robb believes cull cows will become a valuable commodity in 2009 and beyond. He points out that cull cow prices have dropped for the fall. But he suggests if you have the feed – and can make the economics pencil out – it may be worth feeding culls through the winter. “We will probably see a big bounce back in cull cow prices in March-April 2009,” says Robb.

He adds, “If I had to bet, I think we’ll see $70/cwt on culls in the next few years. This kind of marketplace is going to make the cull cow a valuable animal for the next couple years.”