Times of change, here and in Cattle Country

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I’ll be holding this space for a while, as Greg Henderson, the editor of Drovers/CattleNetwork for nearly 30 years, resigned his position in August to pursue other opportunities. Greg served our publication and the beef industry well over those years, striving for editorial excellence while championing issues such as beef quality, value-based marketing and anything that contributed to producer profitability. I worked with Greg for the past 20 of those years, most recently as managing editor, and enjoyed his easy-going management style and knowledge of the beef industry. I also serve as editor of Bovine Veterinarian magazine, though, so you soon will see a new editor on this page.

Speaking of change, is it time for the U.S. beef herd to shift into expansion mode? Market forces and Mother Nature have driven an extended period of contraction in our beef herds, with numbers now at the lowest since the 1950s. Some say the traditional “cattle cycle” is dead. There are, however, numerous signs the contraction trend is about to reverse.

The weather this year improved dramatically in many key growing areas. We have what appears to be a record corn crop in the works, and most producers have better supplies of hay and standing forage than they did last year at this time. Economists generally project strong prices for calves and feeder cattle over the next few years. Our beef exports continue to grow and add value to cattle.

There are, of course, barriers to expansion including continued high production costs, land prices, market volatility, the aging population of U.S. ranchers and the value of feeder heifers.

Producers sometimes comment that a shrinking herd is a good thing, since those with cattle to sell benefit from higher prices. That is true to a point, but eventually, a shrinking industry hurts all shareholders.

Here at Drovers/CattleNetwork, we believe expansion benefits the industry in several ways:

It preserves U.S. beef ’s domestic and global market share.

Growth supports the infrastructure that keeps U.S. beef competitive.

Expansion creates jobs across the beef-production chain.

It restores and preserves rural economies.

Opportunity brings the younger generations into beef production.

Beef production prevents development and rural sprawl in agricultural areas.

Growth provides incentives for research and development for new products and systems to improve production efficiency.

We thought expansion would begin last year, but the historic 2012 drought brought another year of herd liquidation. Now, economists and industry insiders are once again talking about opportunities for expansion, which could begin in earnest in 2014. But as we know, the nature of the bovine animal prevents rapid increases in beef production. If a rancher this fall decides to keep 20 percent more heifer calves for breeding, the first calves those heifers produce won’t become beef until sometime in 2016. In the meantime, heifer retention reduces the available supply of feeder cattle and further limits beef production.

We hope to see more heifers staying on the ranch this fall and next, so the industry can return to a growth trend. We’ll continue to provide market analysis and management information to assist readers in their expansion decisions. But we realize it will be a slow process. For more information on the possibility of cow-herd expansion, read “Can the cattle cycle return?” on page 16 of this issue.



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