What does the future hold for the beef industry in Iowa and the Midwest?

For much of my career the discussion has been about a “mature industry” and that only the low cost producers will survive. Competition, efficiency and generally negative margins were the norm for the average producer. The cattle business was survival of the fittest. My economist friends tell me that in a commodity business that is the norm. Everything gravitates towards the breakeven and only the low cost producer or the producer who is able to capture added value survives and prospers.

Today much of the industry is profitable but history tells us that this will likely cycle. The cattle industry in the upper Midwest is in transition, and there is reason for real optimism for the future. After several decades of increasing specialization many farmers are coming to the realization that the integration of crop and livestock is the sustainable future of agriculture in Iowa and the Midwest. Crop farmers realize that livestock adds market opportunities that in turn add value to their crops. Manure nutrients have significant value and can reduce the cost of grain production. These are just a few of the observations that cattlemen told the Iowa Beef Center in surveys conducted last spring and summer. Results of those surveys are summarized in these recent publications:

Iowa Beef Center -- 2014 Feedlot Operator Survey

Iowa Beef Center -- 2014 Cow-Calf Producer Survey

What have we learned about the growth potential of the Iowa beef industry from these surveys?

In the past 5 years 44% of Iowa cattle feeding operations have increased numbers. The reasons for those increasing numbers? Profit, new facilities, value of manure, the opportunity to market corn and corn coproducts through cattle and family members joining the operation. The producers who decreased numbers did so because of the lack of profit or their age.

In the next 5 years 85% expect to either stay the same size (50%) or expand (34%). Cow-calf production has been constrained by available pasture. More than 60% of producers mentioned that competition with row crops, CRP or recreational uses affected access to grass. However, beef cows were viewed as a way to utilize available forage in their farming operation and integrate their family into the rural lifestyle.

In both the surveys, 75% of the operations plan to take a son or daughter into the operation. The average age was in the mid to late 50s and 40%-50% plan to retire in less than 10 years. Only 60% have a succession plan.

In the coming weeks we will be engaging with industry leaders to develop ideas to ensure that growth of the Iowa beef industry is successful and sustainable. We will keep you posted on our progress.

For now, here are several educational opportunities available in February.

  • Feb. 23-27 there will be seven Advanced Bull Selection Clinics at various locations in Southern and Eastern Iowa.
  • Feb. 20 - March 3 there will be four Beef Cow Genetics and Management meetings in Northern Iowa from.
  • Feb. 18-March 25 there will be 10 Feedlot Facility Planning Workshops held across Iowa.
  • Feb. 12 we will once again provide a live webcast of the University of Nebraska—Lincoln Feedlot Roundtable event at 4 locations in Iowa.

More details on dates, locations, program and speakers for all of these events can be found on the Iowa Beef Center website (www.iowabeefcenter.org).