The year is drawing to an end and it's time for my annual visit with Steve Kay. He edits and publishes Cattle Buyers Weekly from his aerie in downtown Petaluma, California. Kay is a one-man publishing empire who also writes for the Australia's Beef Central, Western Livestock Journal, MEAT&POULTRY magazine and BEEF TODAY magazine. He's the author of the U.S. Livestock Industry Review, a monthly report on the U.S. beef and pork industries.
He is recognized around the world as an authoritative and impartial observer of the North American meat and livestock industry. Widely quoted in national and publications like the Wall Street Journal, Forbes and Business Week, he also has a radio program on Midwest ag farm radio KRVN, Lexington, Nebraska.
And, once a year, he takes a few minutes out of his incredibly busy schedule to share his views about the cattle industry with me. I posed the questions; he answered succinctly.
Q. Steve, let's talk about the hot topics that will lead us into 2014. First, the herd is the smallest since 1952, with much of the decline caused by several years of devastating drought in our major cow-calf states. Some people are confident the drought has broken and that, with better cattle prices, we are about to embark on some serious rebuilding. Others point to the advancing age of the average rancher and question if he has the desire or the time to rebuild. What's your take?
A. Drought was the main reason for the decline in herd numbers but high input costs and lack of financing have also inhibited herd expansion. The average age of ranchers and their aversion to risk is another factor. I see no evidence of herd rebuilding starting yet although producers might have kept back a few more replacement heifers this year than last. Remember though that the replacement number on January 1 this year was 200,000 head higher than the year before and all these have gone to feeding and slaughter.
Whether we see an increase in net heifer retention in 2014, i.e., herd growth, will depend on pasture conditions throughout the five largest cow-calf states, the price of calves and feeder cattle, adequate financing to carry that heifer until she has a calf, and other factors. I doubt there will be much herd growth in 2014 because parts of Cow-Calf Country will need at least two years of much improved pasture to encourage producers to increase their stocking rates.
Q. Looking at the next generation of ranchers, we'll need lots of new people to enter the industry as the current crop 'ages out.' Research already shows the oldest group of people in the American work force is farmers and ranchers. Where do we find the next generation and can we do it quickly enough to keep cattle ranching a major part of our agriculture 25 years from now or will we be faced with some major restructuring?