Beef Buzz News
Beef Cow Herd Liquidation Continues to Unfold
Tue, 28 Sep 2021 12:47:51 CDT
On Friday, the USDA released the latest Cattle on Feed report. For more than a year, fed cattle have outnumbered U.S. beef processing facilities’ slaughter capacity, creating a bottleneck. For the second day, Ron Hays, director of farm and ranch programming for the Radio Oklahoma Ag Network, sat down with Senior Vice President of Food and Agricultural Research, Animal Protein at Rabo AgriFinance Don Close to break down the report. Today, Close imagines how the report may influence cow-calf operations.
Listen to Ron's conversation with Don here
“I do not see anything radicle enough in this report to really have a big impact on our cows,” Close said. “The writing is on the wall. We will continue to see female liquidation and a healthy decline in total cow numbers when we get to the January inventory report.”
Fewer cows equal fewer calves coming to market, which Close believes is the right direction. He said he does not think the transition is and will continue to happen as quickly as people expect.
“(The U.S.) peaked cow numbers win 2019,” Close said. “This is our third year of liquidation … I think at this point in time we would expect to see continued cow liquidation through 2022, but because of that continuous decline, I do think that we will see a measured improvement in prices for all weight classes of cattle in 2022 and especially in 2023."
Cattle producers and packers have worked to balance the number of slaughter-ready cattle with processor capacity after the bottleneck caused by the COVID-19 pandemic. An aspect that is still askew is the large margin of processor profit vs. producer profit, at a time when beef demand is reaching record highs. About a year ago, the 75% Plan was assembled by the National Cattlemen’s Beef Association members with the goal of achieving robust price discovery in the federal cattle market.
“I think that all of the marketing regions have done an incredibly good job of adhering to the agreement,” Close said.
He expects the industry will still see short-term periods when there are just not enough cattle moving to meet the goals of the 75% Plan, but in all the industry is working hard to meet the new standards put in place to help producers.
Click on the LISTEN BAR below to hear more from Ron Hays and Don Close as they talk about the latest USDA Cattle on Feed report, plus go over the latest USDA Quarterly Hogs and Pigs report.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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