Beef Buzz News
CattleFax CEO Randy Blach Says Increasing Slaughter Capacity is The Best Way to Maximize Price for Premium Cattle
Tue, 06 Oct 2020 08:09:38 CDT
Increasing slaughter capacity may be the best way to maximize the value of premium animals says Randy Blach, CEO of CattleFax, a global leader in beef industry research, analysis and information.
Ron Hays Beef Buzzes With Randy Blach
Blach was a featured speaker for this week's virtual meeting of the Texas Cattle Feeders convention.
I really believe what we are talking about today is as much a capacity issue as it is a price discovery issue, he said.
If we had another 3 or 4,000 head capacity in our marketplace today, we wouldn't be having this discussion, Blach said.
Balancing price discovery with maximizing value for premium cattle is the goal.
Increasing slaughter capacity would increase competitiveness, Blach said.
From 2000 to 2005 about 50 percent of our production was choice and prime grades. Today that is in the mid to upper 80's, Blach said.
There are a lot of cattle that sell on the grid that don't bring a price premium, but those that are able to hit the price or quality targets will generate additional revenue, he said.
Blach stated the industry must decide if the cash market is worth saving.
Yes, he said, especially for the Kansas, Texas, Oklahoma region.
The CattleFax CEO said the odds for getting additional capacity are favorable given current market conditions.
I am a believer in the free market system and when you have the kind of profit opportunity, they have today that will attract additional capacity, Blach said.
They will be smaller plants, close to 1,500 head per day using robotics, he predicted.
That's where the future of our industry is with more of the smaller plants that don't cost as much and they can be nimble and focus on niche products for the consumer, Blach said.
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