08/21/07 Cattle industry expansion slowing

Expansion in the cattle and hog industries has slowed down and a USDA analyst says only time will tell if the industries are headed for contraction. USDA Shayle Shagam says this year's calf crop is expected to be smaller, feedlot inventories are down five percent from this time last year and placements in the feed lots are down 17 percent. SHAGAM "Any expansionary movement has been limited, some of that by dry weather. Cow calf operators have been forced to liquidate some of the cows in the Southeast and as a result we're just basically seeing a stalling of growth in the cattle inventory." That was the lowest July feedlot placement since USDA started keeping those numbers in 1996. What he does expect to see the rest of this year are good prices for steers, averaging 90 dollars per hundredweight. But there are problems for some lending institutions and that's been reflected in a dropping stock market and interest rate pressures. Shagam says the interest rates could impact livestock operators. SHAGAM "Obviously there's an opportunity cost for keeping cattle on feed and the ability to borrow money to support certain enterprises could obviously have an impact on producers." For now consumer demand for meat is still very high. Today's Idaho Ag News Bill Scott