- The "cattle cycle" exists because of the tendency
for cow calf operations to expand herds while cattle prices are good and
liquidate or down size herds when cattle prices are low. At least
one Agricultural Economist suggests that bucking the trend may have advantages
for the cow calf operation that has the financial stability and discipline
to do so. Dr. Harlan Hughes, North Dakota State University Agricultural
Economist, Emeritus recently told a group at the 2001 Cattlemens' College
at the NCBA Convention that saving extra replacement heifers during good
cattle prices may be counter-productive. As he looked back at recent
cattle cycle patterns, he noted that cattle prices often were lower in
the mid part of a decade and higher at the end and start of decades.
With recent indications of on-going herd expansion during the last two years of good cattle prices, we can expect another dip in the cattle cycle in the mid part of the current decade. Dr. Hughes suggests that now is the time to sell most of the heifers rather than save them for your own herd and prepare to save extra heifers when the prices are low. Those low priced heifers then would be in the best part of their productive lives when the cattle market peaks again about 4 to 5 years later. This strategy would require financial discipline to save back extra cash during the "good times" for use as needed cash flow during times of low prices and fewer head to sell.
Another reason that Oklahomans may want to consider this strategy is
to allow pastures to recover and regain condition. The last two hot
dry summers have wreaked havoc on many pastures. Fewer cattle eating
on those pastures MAY give them a better opportunity to recover and be
in improved range condition. Obviously plenty of rainfall would be
an important ingredient in the improvement of the pastures.