Department of Animal Science

 

Date of this Version

2011

Citation

Presented at Range Beef Cow Symposium XXII, November 29, 30, and December 1, 2011, Mitchell, Nebraska. Sponsored by Cooperative Extension Services and the Animal Science Departments of the University of Wyoming, Colorado State University, South Dakota State University, and the University of Nebraska–Lincoln.

Abstract

Beef production is always in a state of flux. Nothing in this business stays the same for very long. The current situation is truly unique compared to anything we have experienced in the past. Demand is growing. Supply is shrinking. Cattle prices are rising and show no sign of stopping, despite reaching record highs this year. Production costs are also increasing. There are some very real opportunities in the cow-calf business and other producer segments. But financial risks exist as well. My belief is that the good outweighs the bad. Cow-calf producers could see some of the best profits during the next five years than they have experienced in decades. My task for the XXII Range Cow Beef Symposium is to share observations on structural changes taking place in the U.S. beef supply chain. I also hope to identify a few opportunities that will benefit attending cattle producers as they strategize, re-shape, and otherwise position their operations for success in the years ahead.

Is this a good time to be in the cow-calf business?

Apparently quite a few people don’t think so. Beef cow numbers continue to decline. Certainly, the South Plains drought has driven cows off the range. However, even in other geographies, enthusiasm for the cow business appears lacking. Calf prices are record high, but feed costs are keeping pace. As one veteran cowman recently quipped, “I can’t be a low-cost producer when I have no grass.” Moisture in the right places could change that significantly within 6 to 12 months time. Growing beef exports, stable domestic demand, and projected large declines in U.S. beef output over the next several years suggest a positive price trend. We probably do not have to worry about prices falling from current lofty levels. If you can manage your costs effectively, this is a great time to be a cow-calf producer.

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