What is in this article?:
- Cow-calf producers should continue to prosper for at least the next few years, as beef exports boom and national herd numbers remain low.
- Current good prices for their cattle should remain in that lofty range for two years or even longer.
- Beef production is still an industry requiring tough decision-making. That is unlikely to change, no matter what the price per pound may be.
Beef production is still an industry requiring tough decision-making. That is unlikely to change, no matter what the price per pound may be.
Cautions and warnings
“Don’t get caught up in the euphoria. These are dangerous times when we get all the people running in the same direction. Markets make corrections. Markets work, and they will continue to work. We will grow the cow herd over the next several years,” he says.
While it is entirely possible that cow numbers will indeed increase, it will not happen quickly or easily. For one thing, there must be enough quality bulls to produce those extra first-rate calves the export markets demand.
“The reality is that we need to find 3 million head over the next 5 years, and we’re still killing off cows. In order to expand, we have to have more replacement heifers and bulls to breed them. If you figure 20 to 30 cows per bull divided by a million, that tells you there’s going to be a great deal of demand in the registered cattle business,” says Joe Massey, International Brangus Breeders Association executive vice-president.
Keeping beef quality high during expansion has to be the primary consideration, says Ryan Peterson, herdsman for Leachman Cattle, Wellington, Colo., which produces Angus, Red Angus, Charolais and composite breeding stock.
“If conditions favor expansion, your genetic selection decision becomes paramount when you’re trying to decide if you’re going to progress from within the herd or bring outside genetics in,” Peterson says.
“People who have progressively moved the genetic base forward in the cow herd are going to see dividends. Those who don’t make genetic improvements in the cow herd are going to fall behind. There are lots of things to consider: breed, type, pedigrees, birth weight, feed efficiency, rate of gain, plus cow size. How big is too big? Is a 1,600-pound cow optimal? How about 1,200 pounds? The genetics the producer selects to expand with have a big impact.”
Even with good beef prices, cattle producers still face a lot of risk.
“You’ve got to be aware of the risk management required to be profitable because of the volatility of this industry,” says Matt McKamey, Rabo AgriFinance relationship manager, Great Falls, Mont.
“Your risk exposure can really make it difficult to be profitable. The margin hasn’t changed tremendously but it takes a lot more capital to get there. You have to manage risk responsibly.”
It’s still an industry requiring tough decision-making. That is unlikely to change, no matter what the price per pound may be.
“The big deliberation is, are you going to sell that 700-pound heifer for $1,000 or keep her and get a calf out of her? We’re getting a good payday for calves but we know we need to expand. You could say we’re catching up for all those off-years when the market wasn’t good,” says Butch Foster, Virginia Cattlemen’s Association fieldman.
More than 8,200 people attended the NCBA meeting in Nashville. J.D. Alexander, a third-generation rancher and cattle feeder from Pilger, Neb., is the new NCBA president.