– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee
This week a question rolled in related to cattle inventory and expectations of cattle inventory the next few years and its influence on market prices. Answering this question correctly is easier than Rocky the Flying Squirrel carrying Bullwinkle.
Relatively low cattle prices the first half of 2021 and drought concerns in some major cattle producing regions will definitely result in a lower beef cattle inventory on January 1, 2022. This means a reduced supply of calves and feeder cattle, which should support prices in 2022. As prices increase, more heifers will be expected to be retained. This time of retention will further support feeder cattle prices. There is a chance that beef cattle inventory sees a slight increase in 2023 but certainly by 2024. However, the cattle market should be in a bull market at least through 2024 given the current situation.
These expectations could be disrupted by outside factors such as drought or supply disruptions. However, one cannot make decisions based on expectations of unknown disruptions.