After a painful period of slim profit margins for ranchers, it now appears that the beef industry is experiencing a cyclical recovery, bringing higher prices to ranchers, according to a UC Davis agricultural economist. For several years low beef prices have forced cattle ranchers to gradually reduce their herds. Prices bottomed out in 1996 but have been slowly increasing since then, notes Steven Blank, a UC Cooperative Extension economist in the Department of Agricultural and Resource Economics. The price increases are now sufficient to trigger a "herd buildup" phase in the industry, he says. Blank points to data showing that ranchers are responding to higher beef prices by sending fewer heifers to market so that those animals can be used for breeding and herd expansion. An increased planting of U.S. feed corn this year will likely enhance that trend, providing feedlots with lower grain costs and the ability to pay ranchers more for their feeder cattle, says Blank, who projects that beef-cattle prices will likely continue on the upswing for the next one to two years. "It is certain that the cattle cycle will continue to raise and lower prices over time," says Blank. "However it is quite uncertain whether the 'good years' will outweigh the 'bad years' in this era of increasing global competition." He stresses that individual ranchers need to focus on their own long-run returns on investment to judge whether cattle production is still sufficiently profitable for them.