2015 U.S. Herd Expansion Could Surprise Cattlemen, Analysis From CattleFax's Lance Zimmerman

Even with the flash drought of 2015, it appears the U.S. cattle industry is set to have another great year of herd rebuilding nationwide and in the Southern Great Plains. Lance Zimmerman is with the CattleFax organization, the market analysis arm of the cattle industry. The U.S. last year added 600,000 cows to the U.S. cattle herd. CattleFax believes herd expansion will be even better in 2015.

 

 

“I think people need to prepare themselves for a number that’s fully over a million as we look at what we added to the herd this year,” Zimmerman said.

 

CattleFax is watching the fall livestock auctions for indications of herd expansion. With 70 to 80 percent of calves selling during the fall run, Zimmerman said the percentage of heifers being sold at auction markets has been smaller than last year. He believes this trend will carry over into 2016.

 

Herd expansion will need to continue in order to make up for the decline in cattle numbers, especially because of the devastating drought that faced the Southern Plains. Zimmerman said three to four million head of cows were taken out of beef production during the drought. The beef industry will recover the first two to three million head fairly quickly, but levels beyond that will depend on domestic and international demand.

 

“If we can get our international markets recovered a little bit, get the consumer to be a lot more comfortable paying these prices for beef, than they have been lately, than there’s no reason to not expect that we can’t at least build our herd back up to the levels it was at the start of this decade,” Zimmerman said.

 

U.S. meat exports have struggled in 2015. The strength of the U.S. dollar hasn’t helped the situation. With higher prices for beef, Zimmerman said that made the U.S. product very high priced in the global marketplace and international markets like stability. While the U.S. dollar will continue to be strong this next year, he said stability will be key. Global economies will also need to grow this next year. If that happens, then Zimmerman thinks 2016 has potential to be a better year for U.S. beef exports.