During the USMEF Strategic Planning Seminar in Oklahoma City, Senior Farm and Ranch Broadcaster, Ron Hays, got the chance to catch up with the President and CEO of CattleFax, Randy Blach, about beef cow liquidation.
Compared to January of 2022, Blach said there will be a significant reduction in the cow herd. The dairy herd remains stable, he said, but the beef cow herd has declined sharply.
As for the feeder cattle and calf supply, Blach said the number of high-quality steers and heifers will be down by around 700,000 to 800,000 head next year.
“Beef production will be down 3 percent per capita-beef consumption because we won’t have the supply- we will be off 2.5lbs,” Blach said. “There is just not going to be as much product out there as what there has been in the last several years.”
The U.S. is coming off of record-high beef production totals in the last two years, Blach said, but those will drop significantly.
The light at the end of the tunnel, Blach said, will be the end of the drought.
“It takes two things to expand the cow herd,” Blach said. “One is profitability, and the other is plenty of green grass so we can grow feed.”
Blach said he wants to remind producers that the cycle high in supply would have been in 2020 if COVID-19 didn’t break out. The supply was drug out an extra 18 months to two years because of the COVID impact, he added, which backed cattle up.
If producers can hold it together, Blach said a payday is coming soon. The markets are predicted to be significantly higher for the next few years, he added.
“I am not talking about a few dollars,” Blach said. “I am talking dollars and dollars higher.”
Blach also talked about current beef processing issues, including where the industry stands in packing plant capacity.
Several new plants are being built, the first to open being in the Pacific Northwest, Blach said, and several plants are going through expansions or enhancing technology to improve efficiency to harvest more cattle.
A few large plants are being built currently, Blach said, but completion will be a few years down the road.
“Those are going to bring in a lot of new capacity and obviously, they are going to come in when fed cattle supplies are tighter, but I really believe ultimately what we will see happening here is we just won’t have the need to run these plants on Saturday,” Blach said.
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