ing 1924, 1925 and 1926. It was not until 1927, however, that many cattlemen 

 realized that the turn in the lane had been reached and that the cattle cycle for 

 them was now on a dividend paying basis. By October, 1927, the purchasing- 

 power of beef reached 97 per cent or slightly better than the average of the year 

 1919. By November 1927 it crossed the par line and stood at 101 per cent, an 

 increase of 20 points compared with November, 1926. 



During the period of low cattle prices, Montana cattlemen were forced to a 

 greater flexibility in production. They lowered the age of their marketing and 

 shifted from a steer herd to a cow herd basis. In this way they increased their 

 rate of turnover, marketing large numbers of younger livestock. 



CATTLE EXPORTS 1920-1928 



Inspection records of the state office of brand inspection show the follow- 

 ing classifications of Montana cattle exports as steers, cows, calves and bulls for 

 the period 1920-1928 inclusive: 



THE CATTLE CYCLE 



Montana's cattle industry at present is in the first stage of a period of rela- 

 tively high cattle prices and light marketings which has followed a period of low 

 prices and heavy marketings. The periodic swings of these two basic factors 

 from high points to low points and back again to high points in the past have 

 averaged from 14 to 15 years. This means that an average of 7 to 8 years 

 elapses before high prices give way to low prices and about the same space of 

 time before low prices again give way to high prices. If cattle operators respond 

 to the present high prices in a way similar to the way they have responded in 

 the past, since cattle records are available, they will increase their holdings to a 

 point where marketing will be heavy enough to bring about low prices again. 

 When low prices prevail a curtailment of production will again ultimately bring 

 about relatively high prices. 



HIGH PRICES AND LOW SUPPLIES 



In the stage of high prices the degree to which stockmen increase their breed- 

 ing stock and to which new operators enter the business determines the peak 

 these prices will reach by the amount of marketable numbers that are with- 

 drawn from markets for these purposes. In the stage of low prices the low price 

 is influenced by the extent to which operators are forced to sell off their holdings 

 to satisfy indebtedness acquired during the expansion period; at such times many 

 of the new operators, who came into production when prices were high, become 

 discouraged or are forced out. 



Other price factors may cause temporary price fluctuations but none will 

 upset these periodic swings in average cattle prices so long as producers con- 

 tinue to respond to high prices by increasing their production which ultimately 

 leads to larger marketings and lower prices again. 



Recognition of the cattle cycle in plans of cattle operators generally would 

 smooth to some extent the peaks and valleys in the periodic swings and add 

 stability to the business. 



MONTANA CATTLE INDUSTRY TODAY 



In contrast with the organization of the cattle business in Montana of twen- 

 ty-five years ago, today finds the industry with a relatively large investment 

 in owned land and other equipment involving fixed charges in the way of taxes, 

 interest or depreciation that are highly inflexible. In times of high prices for 

 cattle these charges represent a relatively small percentage of those prices and 



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