In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays speaks with Don Close of Terrain about the cattle market, recent disruptions affecting feedlots, and the outlook for rebuilding the U.S. beef cow herd. Despite ongoing uncertainty, Close says tight cattle supplies and strong consumer demand continue to support a positive market outlook.
Cattle Industry Sees Young Producers Entering the Business
Reflecting on his years of involvement with the cattle industry and TCFA, Close said one encouraging development is the number of young people entering the business. “We always want to say that we don’t have any or enough young people coming into the industry,” Close said. “You get to looking around from when I was around before, there’s a lot of young guys in here. So I think there’s some real optimism on that front that we do have a future.”
However, the industry continues to face challenges, including disruptions that have made it more difficult for feedlot operators to plan and move cattle.
Market Disruptions Add Challenges for Feedlots
Hays and Close discussed recent Immigration and Customs Enforcement (ICE) activity in southwestern Kansas and the resulting disruptions to cattle movement and scheduling.
“It was a big market disruption,” Close said. “It set back some scheduling of some cattle, not a huge problem, but just with all the challenges we have right now, it’s just one more we didn’t need.”
Hays described one situation in which a producer hauled a load of cattle to Liberal, Kansas, only to have the cattle sit on the truck throughout the day before being sent back home. “Yeah, and you know, what a waste. What a waste.” Close said.
Close said disruptions like these contribute to market uncertainty, making it more difficult for feedlot operators to feel confident about moving forward.
Strong Cattle Market Fundamentals Remain in Place
Despite the interruptions, Close said the underlying fundamentals of the cattle market remain favorable. “If we look at the core fundamentals, we’ve still got the tight supply of cattle we’ve been talking about for years,” Close said. “We’re still seeing incredibly solid demand on the consumer side, but we’ve just got so many interruptions, unnecessary interruptions, and noise.”
Close said he hopes some of the market uncertainty will ease in the coming weeks, allowing producers to focus more on the fundamentals driving the industry. “The structure of the market is still so incredibly positive,” Close said. “If we just manage to stay out of our own way.”
Cattle on Feed Report Could Clarify Herd Expansion
With the U.S. cattle herd needing to rebuild, Hays asked Close whether the industry is making progress toward expansion.
Close said recent weekly slaughter data has shown a reduction in heifer slaughter, potentially indicating that producers are beginning to retain more heifers for breeding. However, the trend has not been as clear in weekly auction market data. “We are seeing with the weekly slaughter data and that reduction in heifers, it’s going on long enough that we got to think, okay, we’re seeing some moderate level of expansion going on,” Close said.
He added that the October Cattle on Feed report should provide additional insight into the situation, particularly through its steer and heifer breakdown. “We need that cattle on feed data to kind of clarify that topic,” Close said.
The report is expected to offer a better look at the cattle available in feedyards and help determine whether the decline in heifer slaughter is translating into meaningful herd expansion.
Older Cow Herd Could Increase Heifer Retention Needs
Hays also asked whether weaker cull cow prices resulting from market uncertainty might encourage producers to keep older cows in their herds for another calf.
Close said some producers may choose to hold onto cows longer, but he cautioned that years of herd liquidation have left the industry with an aging cow herd.
Close said the age of the cow herd and increasing losses of older cows could make rebuilding more challenging. “As we have, the fallout from that with the average age of the cow herd is old, and the increase in attrition from those cows only intensifies the additional number of heifers that are needed to actually grow the business,” Close said.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR above for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
