The Cattle Cycle: Global Impacts and Domestic Indicators

A CRS Fact Sheet sponsored by Merck Animal Health

A cycle implies a series of events, regularly repeated in the same order. Between the double dip recession in 1980 and today, irregular activity within the cattle cycle has led some to call the concept into question. The cattle cycle here describes the repeatable series of consolidation, expansion, peak and liquidation in the Canadian cattle herd. The traditional assumption has been that over a period of 7-13 years, this cattle cycle repeats – influenced by price, production and profit – recognizing that other variables such as weather, major economic shifts, equity positions and interest rates may delay or accelerate the cycle. Livestock sectors have historically been constrained by the biological capabilities of the reproductive cycle as it interacts with consumer demand, the price cycle and other domestic or local factors. A biological lag from when the price signal reaches producers until the production response will always exist to some extent. The question is: how much can market information shorten this lag?

In the last 15 years however, the cattle cycle has lacked a cyclical pattern, having consolidated twice and liquidated three times. Predictable peaks and trough lines have become harder to identify.

How do global events impact the cattle cycle? Are conventional micro-economic indicators enough for producers making production decisions today? In this fact sheet, we explore these questions by adding international insight to domestic analysis of the cattle cycle.

Go to http://canfax.ca/FactSheets.aspx for the full article.