The latest statistical abstract from the U.S. Department of Agriculture's National Agricultural Statistics Service (NASS), reported elsewhere in today's paper, should be almost total good news for the cattle industry. It shows cattle numbers down in every category, that such a downward trend is continuing, and that herd expansion is not currently on the horizon.
This should mean strong cattle prices, with strong beef demand, both domestically and internationally, competing for all the available supply and driving prices even higher. Unfortunately, this is not the case.
The weak world and U.S. economy trumps all this good news, and cattle prices are limping along at barely break even, and even losing, levels. Credit is tight to non-existent, job layoffs are rife, beef demand is falling and the uncertainty of it all keeps what should be a great time to be in the cattle business, mediocre at best.
Time magazine has a great article on the rural economy this week, and how, unlike urban America, when something closes down in a recession--it most likely won't come back when the good times return. Rural towns and population are shrinking once again in the current downturn, and based on past experience, won't be coming back.
The article speaks specifically of churches, and of the consolidation underway, with one pastor serving several small congregations, widely dispersed. But the trend applies in other areas of rural life too.
In the case of agriculture and cattle, the human population may decline, but modern technology and efficiency keeps food production up and growing, with fewer people involved. The community may shrink away, but a strong level of agricultural production continues on.
These trends and NASS statistics still portend a great future for the beef business. It will be tough to wait out the next year or two of international economic downturn, but sure to follow is an expansionary phase that will be very profitable for those who stick it out.
There's still reason for optimism around the corner--despite the present gloom.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment