Doane Advisory Services said last week that the U.S. cattle herd remains in the contraction phase of the long-term cycle.
"The cattle cycle normally lasts about 10 years from trough to trough. The most recent cycle low in the cattle inventory was 2004 so a new cycle low is due within the next year or two," the service said.
The expansion phase of the cycle, peaking in January 2007, was cut short by rising grain prices and severe drought conditions, particularly in the central and southern Plains, the company wrote.
High calf and feeder cattle values were expected to result in a shortened cycle in the cattle inventory, encouraging producers to expand the cow herd. However,...