Cattle market predictions; PLUS: 3 components of the cattle cycle

Are you bearish or bullish on the cattle market? Do you think the beef industry will continue to follow the traditional cattle cycle? Here are our predictions.

Environmental & Natural Resource Economics: The Austrian View  I was once asked by the President of the University where I was teaching Agricultural Economics and Agri-Business at the time if I knew why God made economists. Naturally, I had to bite so I said “No.” He said it was to make the weathermen look good. And he was probably right — jtl, 419

by in BEEF Daily

A Handbook for Ranch Managers In this week’s Trending Headlines, BEEF Senior Editor Burt Rutherford takes a look at where cattle prices will go from here. According to economists at the Daily Livestock Report, marketplace volatility shows that there is little consensus among market participants at this point on what cattle prices will do for the rest of the year.

Planned Grazing: A Study Guide and Reference ManualRead about the bearish and bullish views for upcoming beef prices here.

Really, it’s anyone’s guess what the market will do, and if I had the answers, I would certainly be a millionaire. However, it sure doesn’t hurt to speculate. In my October column for BEEF, I shared my somewhat optimistic views on the cattle market. Remember that just because Combat Shooter's Handbook Reconnaissance Marine MCI 03.32f: Marine Corps Institute The Betrayed: On Warriors, Cowboys and Other Misfitswe aren’t at the phenomenal levels from 2014 doesn’t take away from the fact that these are still some of the highest prices we’ve ever seen on record.

The Essence of Liberty: Volume I: Liberty and History: The Rise and Fall of the Noble Experiment with Constitutionally Limited Government (Liberty and ... Limited Government) (Volume 1)  The Essence of Liberty: Volume II: The Economics of Liberty (Volume 2) The Essence of Liberty: Volume III: A Universal Philosophy of Political Economy (Liberty: A Universal Political Ethic) (Volume 3)A recent BEEF poll showed that 57% of readers are in the optimistic camp as well, predicting the fall calf run as a great one. Meanwhile, 43% of respondents said prices have been too good for too long and cattle prices will continue to weaken.

You can read my column, “Fall market optimism” on page 62 of the online edition of the October issue.

To understand where prices are going, it’s important to know where they’ve been. Tim Petry, North Dakota State University Extension livestock economist, recently wrote a review of the cattle cycle, which appeared in Ohio State University’s Beef Cattle Letter. In his article, Petry shared the three components of the cattle cycle, including:

1. Cattle inventory cycle

Petry writes, “Cattle inventory cycles experience periods of increasing numbers called accumulation phases and periods of decreasing numbers called liquidation phases.”

2. Beef production cycle

Petry explains, “Beef production cycles lag inventory cycles by about one year because to liquidate numbers, more cattle must be harvested. To accumulate numbers, fewer cattle are harvested.”

3. Cattle price cycle

Perry adds, “Price cycles are typified by periods of increasing prices called increasing phases and decreasing prices called decreasing phases. Cattle price cycles tend to be the opposite of beef production cycles. The two factors that most affect the length of cattle cycles are the reproductive biology of cattle and weather.”

Despite the typical 10-year cycle, Petry says there are a number of factors that changed the cycle in the last 15 years, including a severe drought, unforeseen beef demand shocks following the terrorist attacks on Sept. 11, 2001, a case of bovine spongiform encephalopathy (BSE) in December 2003 (and subsequent cases), a terrible recession resulting in a financial crisis (the worst since the 1930s) in 2008-09, federal government policies such as the Energy Policy Act of 2005, competing livestock diseases such as H1N1 and avian influenza, volatile corn prices thanks to the ethanol boom, and global market issues.

Petry writes, “For many years, cattle producers experienced a somewhat predictable cattle cycle approximately 10 years in length. However, during the last 15 years, an abnormal number of outside events have caused the cycle to be less predictable and left producers wondering if the cattle cycle is relevant for planning purposes. The likely answer to that is yes, with particular emphasis on the next several years.”

Where do you think cattle prices are going? What is going to be the next thing to occur to cause a big shake-up in the beef industry? Are you bearish or bullish on the cattle market? Share your thoughts and predictions in the comments section below.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Penton Agriculture.

Environmental & Natural Resource Economics: The Austrian View

edited by

Dr Jimmy T (Gunny) LaBaume

Is now available in both PAPERBACK and Kindle

BookCoverImageMurray N. Rothbard was the father of what some call Radical Libertarianism or Anarcho-Capitalism which Hans-Hermann Hoppe described as “Rothbard’s unique contribution to the rediscovery of property and property rights as the common foundation of both economics and political philosophy, and the systematic reconstruction and conceptual integration of modern, marginalist economics and natural-law political philosophy into a unified moral science: libertarianism.”

This book applies the principles of this “unified moral science” to environmental and natural resource management issues.

The book started out life as an assigned reading list for a university level course entitled Environmental and Natural Resource Economics: The Austrian View.

As I began to prepare to teach the course, I quickly saw that there was a plethora of textbooks suitable for universal level courses dealing with environmental and natural resource economics. The only problem was that they were all based in mainstream neo-classical (or Keynesian) theory. I could find no single collection of material comprising a comprehensive treatment of environmental and natural resource economics based on Austrian Economic Theory.

However, I was able to find a large number of essays, monographs, papers delivered at professional meetings and published from a multitude of sources. This book is the result. It is composed of a collection of research reports and essays by reputable scientists, economists, and legal experts as well as private property and free market activists.

The book is organized into seven parts: I. Environmentalism: The New State Religion; II. The New State Religion Debunked; III. Introduction to Environmental and Natural Resource Economics; IV. Interventionism: Law and Regulation; V. Pollution and Recycling; VI. Property Rights: Planning, Zoning and Eminent Domain; and VII. Free Market Conservation. It also includes an elaborate Bibliography, References and Recommended Reading section including an extensive Annotated Bibliography of related and works on the subject.

The intellectual level of the individual works ranges from quite scholarly to informed editorial opinion.

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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