“Get your house in order.” That was the advice Joe Morgan of Poky Feeders, Scott City, Kan. gave cattle producers who were on the beefSD and Annie’s Project ag industry tour in July. 
Morgan manages 80,000 cattle on feed yearly. Originally from Iowa he has been feeding cattle since 1985. He has been along for the ups and downs of the cattle cycle ride and believes ranchers need to pay attention to the next few years. He says in 2017 there will be a million more cattle on feed.
“This is the biggest and quickest expansion of the cowherd I have ever seen in my life,” says Morgan. “Weights are not going down on these cattle and we are producing more beef with fewer head. Cattlemen need to wakeup and see that we are not going to need as many cows to feed the demand we have. We will run out of shackle space because so many packers are closing.”
Marcus Brix of CattleFax supports Morgan’s comments on herd expansion saying in July there were 750,000 more beef cows in the U.S. herd. Aggressive expansion has been seen in the Southern Plains states where large numbers were lost in recent years to drought sell-offs. 
“The economic switch to expand was switched,” explains Brix of current herd numbers. By 2016 it is expected that the cow inventory will be at 32 million head. 
Brix says CattleFax believes the cattle market has hit its cycle peak and will now go into a gradual decline.  After much discussion in house, CattleFax is projecting 2018 prices for calves 550-600 weight will be $205/cwt and $170 for 700-800 weight feeders. 
Exports and increasing domestic demand will continue to be key in keeping the demand and price for beef stable. Mexico, China and Australia play into the export profitability equation. Mexico is currently going through a herd expansion of their own and are importing less U.S. beef. China is cracking down on black channel U.S. beef trade that was filtering in from Hong Kong and Australia is proving to be a formidable fighter for key market shares in Asia. 
The good news might lie in the domestic demand. Gas prices have dropped and with that extra disposable money people are more willing to spend it on food. Brix shares that there is an upward trend in fast casual eateries like Qdoba Mexican Grill. These type of restaurants are offering fast service with higher quality foods. 
“A drop in gas prices equates to $600 per person in savings. There is more room now for people to spend on meals outside the home,” says Brix.