Cow-calf producers are seeing some of the strongest profit margins in decades, after dealing with production issues including drought and high feed prices.

 

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Cow-calf producers are about to reap the benefits of the strongest profit margins in decades, as reported in an article by Jim Minert of Purdue University.

After suffering from high feed prices and drought in recent years, the U.S. beef industry experienced a run-up in production costs.

This lead producers to reduce beef-cow inventories to levels not seen since the early 1960s.

The dramatic decline in beef supplies pushed retail beef, slaughter cattle, and calf prices all to record levels in 2014.

Producers are likely to expand their herds in the next few years due to sharply lower feed grain prices, increasing forage supplies and record high calf prices.

However, it will take several years before expansion produces significantly larger beef supplies and weaker cattle prices.