Wednesday, June 10, 2015

Drought Was Just One Reason the US Cow Inventory Declined

John Paterson
National Cattlemen's Beef Association

What are the causes of the change in cow numbers?
1. Drought
2. High feed prices
3. High operating costs
4. Age of beef producers
5. Competition with crop production for better income
6. Price of cull cows
Reduction in cows numbers has been due to more factors than just drought.

We have seen an 18% drop in producers from 35 to 55 years old. Sixty-five percent of the land is owned by producers over 55 years old.

There still remains unused capacity in the packing plant sector.
There is $65 return for acre for crop production, but only a $16 return for beef production. The switch from pasture to crop has reduced cow inventory in crop producing states.

Chandler Keyes stated that seventy percent of our beef comes from thirty percent of our producers.
Currently, the beef herd is expanding faster than expected.

Dr. Pete Anderson says the beef industry must produce big, high quality cattle to maximize revenue.

Decker's Take Home Message:
We know prices will come down once supply increases. What is your strategy to remain profitable? Using genetic tools to produce a high-quality product may be an effective risk management strategy.
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