Cattle farmers are poised to enjoy better times as the economic recovery takes hold at a time of shrinking herd numbers, two leading academics have advised in separate reports.

Mark Welch, an economist at Texas AgriLife Extension Service, said cattle farmers faced a "very profitable future", thanks to the squeeze reflected in a decline in heifer numbers – an indication of breeding potential – to a 30-year low.

"We slaughtered a lot of cows last year and this year," Dr Welch said.

"We're not going to have as big of a production of [calves] in 2010 as we did this year.

"When the economy increases and supports the demand... we can predict prices are going to increase next year, and especially going into 2011."

'Stay long in cattle'

His comments were echoed by Chris Hurt, an agricultural economist at Purdue University, who urged livestock farmers to "stay long in cattle".

Breeders should consider feeding out calves themselves, to increase their exposure to the coming bull market in cattle, Mr Hurt said.

Owners of feedlots would be best holding on before forward pricing animals, "in order to give inflation investors a little time to locate the cattle futures trading pit".

"Producer pricing strategy should be fairly clear," Mr Hurt said. "Stay long in cattle, at least for now."

Inflation link 

US cattle values have been excluded from a "resurgence" in commodities buying by investors concerned about the threat of inflation. Prices have fallen 2% since the start of September compared with a 14% rise in oil and 19% jump in corn.

However, this may change as the tide of inflationary investing spreads into a commodity which, among livestock, should be favoured by economic revival.

"Beef and cattle prices are generally more directly impacted by changes in economic prospects than pork or poultry markets, moving downward with recession and upward with recovery," Mr Hurt said.

"The indicators of recovery are beginning to become more numerous."