Chart of the Week

Dr. Curt Lacy (UGA)

On Friday, January 28, USDA released the annual Cattle report. This year’s report had several interesting findings.
2011 01 28 jancattlenumbers-jan282011
Total beef cows that had calved were reported to be 30.86 million head, down 2 percent from last year. Heifers held as beef replacements totaled 5.16 million down 5 percent from 2010. Overall, the U.S. beef cow factory (beef cows plus replacement heifers) shrunk by 790,000 head or 2.1 percent.

These numbers came in right at pre-report expectations. The short-term effects are likely to be firmness in deferred feeder and live cattle futures as it is apparent that the cow herd is not expanding. The long-term implications are that prices will have to increase above current levels to entice cattlemen to begin expanding the herd.

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