At the 2024 Texas and Southwestern Cattle Raisers Convention, Senior Farm and Ranch Broadcaster Ron Hays had the chance to catch up with the President and CEO of CattleFax, Randy Blach, and talk about supply and demand in the beef industry.
“We have just got to stay focused and listen to the consumer,” Blach said. “They have rewarded us with some tremendous demand over the last decade or two decades now. Producers should be emboldened by seeing the way that consumers are acting toward the quality of product we are producing.”
See the graph below of the rise in choice and prime being produced by U.S. cattlemen. In, 2002 choice and prime totaled 57 percent. In 2024, it is expected to be just under 83 percent.
While demand for high-end beef products has been slower due to price increases, Blach said other types of beef remain strongly sought after.
“If you look at a wholesale level, January and February demand numbers were excellent,” Blach said.
When significant declines in production are seen on an annual basis, Blach said the prices will reflect that. Therefore, Blach said it is no surprise when demand slows down due to higher prices.
“You have got to go all the way back since 2015 since these cow-calf producers really made any money,” Blach said. “They made a little money last fall, but it has been a grinder for these folks, and they need to make a run of three to four years of significant profitability to retire some debt that has accumulated and get some confidence that they can reinvest in these herds.”
Although it has not begun yet, Blach expects the cowherd expansion to be slow and prolonged. He also talked with Hays about protecting value-added programs.
“That is the last thing we need to do is to see a situation that we see the government come in and mandate that we have to sell half of these cattle in the cash, or whatever the case may be, and take that kind of opportunity and take that kind of profitability out of our industry,” Blach 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 for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
