Cattle prices have been a hot topic, with many farmers asking how long can we expect prices to stay this high. But we’ve all heard the old saying, “The cure for high prices is high prices.”

Fresh on many beef cattle producers’ minds is the rapid rise of prices in 2014-15, followed quickly by the bottom falling out in 2016.

Given current prices, farmers are wondering when expansion will begin and how rapidly will it bring about lower cattle prices.

The data suggests beef producers should brace for significant expansion in cow numbers in 2026.

Quick look at cow inventory

The first graph below represents the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI) baseline forecast of beef cow inventory.

Although the rate of decline appears to be slowing, based on beef cow and heifer slaughter so far this year, it is expected the beef herd will be even smaller on Jan. 1 than it was at the beginning this year. Then the forecast is to be fairly flat, or only moderate increases by 2026.

In that year, there is an expectation for expansion and growth of beef cow numbers, but those numbers will not show up until the 2027 inventory.

However, I find it fascinating to overlay the previous decade (2010-19) atop the current one (2020-29), as displayed in the next graph below.

If we plot the Jan. 1 beef cow inventory of 2010 and 2020 on the same graph, the numbers are nearly identical. The same is true for 2011 and 2021.

Although the current cattle cycle declines slightly faster, both decade’s corresponding years match a similar downward trajectory.

Cattle cycle on replay

Given the current forecast of beef cow numbers going forward, I thought it was worth recalling what the predictions were 10 years ago when cattle prices were high.

I remember attending market outlook meetings back then when cattle prices soared. At the time, most livestock analysts were expecting a very similar forecast to the one presented above.

Predictions were for several years of higher prices and sustained profitability as producers gradually began to expand, creating a normal cattle cycle. However, what happened was very, very different.

Rather than a soft landing and a slow move to expansion, good profitability in 2014 and 2015 led producers to hold onto every beef cow who had at least half a working udder and one good eye left in her head. In addition, heifers on feed plummeted as producers retained large groups of heifers to grow the herd as quickly as possible.

The result was expansion occurred more rapidly than anyone expected. Unfortunately, we learned “the cure for high prices is high prices” is really true.

The amazing productivity of the American beef producer was ignited, and the result was quickly falling prices.

Future of cattle business

The questions on everyone’s mind today are:

But below is FAPRI’s latest model on when and how much growth to expect in cow numbers. Those increases often result in lower prices.

While the historical data may prove out for the current cattle cycle, there is a chance that other factors such as technology, weather and labor delay expansion and keep prices skyrocketing.

Next month, I’ll take a deep dive into what factors are similar and different today than they were 10 years ago. More importantly, I’ll look at how those differences may affect your operation and the cattle industry moving forward.

Until then, you may want to take advantage of marketing opportunities for your cattle. You never know what the future holds.

Tucker is a University of Missouri Extension ag business specialist, succession planner and national conference speaker. He can be reached at [email protected] or 417-326-4916.