Bernt Nelson… Farm Bureau Economist
The cattle market moves in cycles, usually lasting nine to 10 years. The current cycle is already in its 12th year, including its seventh year of contraction, the longest since the 1990-2004 cycle. The current feedback loop of high prices and the sale of beef cows for slaughter instead of breeding is creating an unprecedented updraft, leading to record prices and leaving it anyone’s guess when the cycle might return to Earth.
In a normal cattle cycle, ranchers would see the best prices of their life and expand. However, today’s ranchers know these prices can’t be trusted to stick around, so they are sending some of their cows to market because they are worth more now than the calves they would produce will be worth in 18-24 months. Most ranchers won’t sell their entire herd, but they may sell enough to continue the tight supply and keep prices elevated. This could continue the feedback loop and sustain the contraction phase of this “hypercycle.”
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