FOR
INDIANA
FARMERS
Lafayette,  Indiana
February  21,   1952
Prepared by members of the Agricultural Staff of Purdue University
Beef Cattle Ride The Roller Coaster
by
LEONARD R.  KYLE, Agricultural Economics
THERE ARE NOW 90> million head
• of cattle and calves on farms in
the United States. This estimate
just released by the United States
Department of Agriculture means
•hat cattle numbers have reached
a record high. The previous peak
°f 85.6 million head occurred in
,945. The current numbers represent an increase of 6 million head
°unng the past year and a 10 mil-
''on increase in the last two years.
hls is the  greatest   increase  that
has
riod
ever occurred in a similar pe-
Most of this change  is  in caltle
otr>er than for milk.  The number of
2Jlk cows in the nation has increases almost continuously since 1867,
beginning  of available  statis-
Their numbers increased from
million  head  in   1867 to  26.9
pillion in 1934.   After the drouth
34,  dairy cow   numbers  de
clined and then reached an all-
time high of 27.8 million head in
1945.
Although dairy cow numbers
have increased since 1867, their
numbers are fairly stable from one
year to the next. Most of the
cyclical variation in cattle numbers
has been confined to cattle other
than milk cows (See chart). Thus,
the cattle cycle can more properly
be called the "Beef Cattle Cycle."
Cycles
Cyclical fluctuations in the number of cattle and calves on farms
in the United States are important
to farmers. Since 1880 five cycles
in numbers have occurred. In the
past, these cycles have had certain
distinctive features. The factors accounting for periodic changes are
both economic and physical. When
numbers increase, it is usually a
result of favorable prices coupled
with an ample supply of feed-
mainly pasture and hay. Business
depressions and the resulting price
declines, overexpansion of cattle
numbers, or droughts and feed
shortages usually result in the cutting back of cattle numbers.
Cattle reproduce relatively slowly, so it requires several years to
build numbers up, once they have
been reduced. In the normal cycle,
cattle numbers begin to decline
about two years after the purchasing power cycle turns down. More
variation in numbers occur in the
western corn belt, great plains,
mountain west and the southwest
than in the area east of Illinois or
west of the Rockies.
The  cycle  in  numbers  averages
about 14 years in length. At the
peak, cattle numbers are about 40
percent greater than at the low
point. The first noticeable cycle
reached its peak in 1890 and
through two more cycles the pattern was fairly regular in length
and scope. Since 1928, the pattern
has been  much  less regular.
The cycle occurs in this manner.
The price of beef goes up as cattle slaughter diminishes. This encourages producers to expand their
operations by keeping more animals for breeding purposes. This
further reduces the available market supply of beef and increases
the price which adds to the incentive to expand. When eventually
the larger supply comes on the
market, cattle prices fall and the
incentive to expand numbers decreases.
By this time, the number of
breeding animals and young stock
has increased and may be pressing on the feed supply. Thus, more
beef is produced and sent to market. The price slumps more and
cattle numbers are cut back by selling part of the breeding stock. This
increases slaughter and temporarily forces the price down fcrther.
When this process has run its
course, prices rise and provide the
incentive for further expansion in
production and the cycle repeats
itself. This is a simplified explanation since changes in the feed supply or the economic situation can
alter this process at any point.
Cattle Slaughter
On January 1, 1947, 81 million
cattle and calves were reported on