The Market's Fine Print

Blame it on the innumerable nooks and crannies within 750 million grazing acres of cattle country. Blame it on the stubborn strand of none-of-your-damn-business DNA that every rancher brings to a government survey. Blame it on cross-eyed and common-senseless bureaucrats known to get lost between "moo" and "poop."

However you choose to shake your finger, late-January skepticism over the pending annual cattle inventory is typically widespread, as standard as a natural suspicion of foaming dogs and talking politicians. That must explain why my tide of stomach acid seems be surging toward Friday afternoon when the official census is scheduled to be unveiled.

Ladies and gentlemen, start your traditional engines of incredulity and faultfinding.

Yet the mudslinging and cat-calling should be somewhat muted this year thanks to the chaotic circus of political number-crunching known as the Iowa Caucus. If you ask me, this presidential free-for-all set to mercifully culminate next Monday makes USDA's imperfect track record look like a beam of helpful light.

After more than a year of mindless chicken dinners, steak fries, state fair junk food, county fair beer, stupid coffee shop batter, ridiculous photo ops, selfies, radio interviews, television reports, podcast exclusives, fund raisers, town hall meetings, main table debates, kid table debates, baby kissing, endorsements, door-to-door campaigning, robocalls, e-mail assaults, polls, more polls, and polls on polls, the besieged citizens of Iowa should be decorated with democratic badges of tolerance and courage.

But the bizarre arithmetic beyond this shamefully expensive parade of presidential wannabes gets even screwier. Once the last penny of the $75-million-plus crazy "color-me-ambitious" coffer is spent in Iowa, guess how many longsuffering voters actually get to cast a ballot?

Those guessing anything above zero will need to retake high school civics. No one early next week will be allowed to vent in a voting booth. In the end, only party activists motivated to slog through the complicated caucus process could have their voice counted. The reality is the overwhelming majority of Iowa's 2 million registered voters will not participate.

But I'm not here to critique the loony way Americans choose the leader of the free world. Such a worry is above my paygrade. I just want to suggest that whatever surprises may or may not surface in the Jan. 1 cattle inventory currently waiting in the wings, the real value of the data is likely to prove considerably more substantial than other recent games of nose-counting.

With that said, let me share a few predictions of the government's new assessment of the cattle herd. While I may seem to be pushing the envelope here and there, you're not likely to equate my ideas with Carly Fiorina and Martin O'Malley rolling out of Iowa with new political life.

First of all, expect to be presented with concrete totals of expansion. I'm sure many of you find such conventional wisdom as daring as "Sanders to win in Vermont" or "Cruz to win in Texas." Indeed, one would have to be market deaf in both ears not to correctly interpret the definite songs of reduced cow slaughter, increased heifer retention, attractive price action, and a larger calf crop over the last several years.

Yet I wouldn't describe the obvious so flatly. Rather, I'm looking for aggressive evidence of herd growth, possibly the kind we haven't seen in decades. Specifically, my spreadsheet has penciled in total cattle numbers as of Jan. 1 at 92.8 million, 3% greater than last year and the largest herd since 2010. In increasing a cool 3 million head over the last 12 months, I'm willing to bet that we've just seen the largest year-to-year growth rate since 1981.

At this point, I feel comfortable in arguing for at least two expansion-friendly possibilities: 1) heifer retention in the current cycle started earlier and more vigorously than most assume; and 2) the 2015 calf crop will be revised upward.

As far as the size of the beef factory, I project an official measurement of 40.15 million head, 3% greater than Jan. 1, 2015, and the largest brood herd since 2011. Noting the rate of growth also seems telling. From 2015 to 2016, the number of mama cows probably jumped by 1.15 million, the largest net team of new recruits since 1994.

Finally, I'll wager the price of Donald's haircut or Hillary's favorite pant suit that the Jan. 1 feeder cattle supply turns out to be as large as 26.8 million head, more than 6% larger than last year. This surplus was no doubt a function between lagging placement activity through the second half of 2015 (only 10.5 million basis big lots, 4% below Jul-Dec 2014 and the smallest second-half total since the data series began in 1996) and a 1%-2% increase in the size of last year's calf crop.

John Harrington can be reached at feelofthemarket@yahoo.com

Follow John Harrington on Twitter @feelofthemarket

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