Senior Farm and Ranch Broadcaster, Ron Hays, caught up with Abbi Prins, Livestock Industry Analyst with CoBank, who, like many experts believes that herd rebuilding will be slow. Prins authored an article for CoBank regarding the current status of the U.S. beef cow herd and the challenges of rebuilding it.
Prins said the project was begun to see what the beef cow inventory is doing in regards to cow-calf operators, rather than from a feedlot standpoint. “We did this because the cow calf producers are providing the next generation of animals to become our beef supply,” Prins said. “How many beef cows do we have? How productive are they? What are their offspring doing to support the beef supply over the next few years?”
She said that the study showed that numbers have been dwindling since the peak in the 1970s, so the question becomes, when will this turn around in the 2020 – 2030-year range?
Through financial analysis, it is apparent that the cow calf producer isn’t in any hurry to begin rebuilding. Record high calf prices create an inviting cash flow for them and allow them to pay down debt from high feed prices and high interest rates.
“We specifically looked at what is going on with Kansas prices,” Prins said. “Based on the livestock marketing center and the USDA, those calves could be sold for around $300 per hundred-weight. If you are selling them at around 550 pounds or so, that is a $1,600 check, roughly, for that animal to go to the feedlot.”
According to a new research brief from CoBank’s Knowledge Exchange, current market conditions are incentivizing cow-calf producers to sell heifer calves rather than retain them for future breeding purposes. From a financial standpoint, the benefit of selling calves for immediate gain far outweighs the risks of investing in those calves to become part of their reproductive cow herd.
“Given the route calf prices have gone, it’s become a no-brainer decision for some cow-calf operators to sell new crop calves for immediate cash flow. As feed prices soften, there is some improved incentive for retention. However, these are unique market conditions as beef calf prices are at record highs.”
Prins said that beef cow herds could potentially return to the numbers of three to four years ago but predicts that the growth will come slowly and not steadily.
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 at the top of the story for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
