Keeping An Eye on Cattle For Grain Market Reaction

Grain Merchandiser and Regional Manager for Crossroads Coop, Bryan Irey says that grain producers should keep an eye on the cattle industry as cow herds are being reduced dramatically, which means less demand for grain.

“I think that probably is the major concern or should be the major concern of the grain producer here in the western Corn Belt at this point as we move forward. I have talked with a couple of well-respected cattlemen over the course of the last two weeks and the numbers are almost earth-shattering. I believe the USDA has the cow herd pegged at a 4% reduction due to the drought and most of these, most of these guys that are in the business boots on the ground type of cattle people would tell you that that number is closer to 8%.

Irey says it could be three years before cattle numbers are back up to pre-COVID levels. Plus he says heifer retention could be limited because feeder cattle could be valued so high, it may be more profitable for a rancher to sell heifers as feeder cattle rather than retain and start them back into a calf production cycle.

On the positive side, he says that China has made some large US wheat purchases in the last few weeks, which has provided support to the corn market. The reason for that is that China has not been able to purchase as much corn from Brazil due to drought.