Optimism Amidst Adversity: Resilience and Hope Remain in the U.S. Cattle Industry
State of the Beef Industry Future 091923
Implications of the widespread, historic drought and massive herd liquidation will likely continue to be uncovered over the next several months in U.S. cattle production.
Reaching 62-year lows in the U.S. cattle inventory, Michelle Rook reports on AgDay that cattle producers faced tough decisions, yet remain optimisic about the future of the industry.
For Union Center, South Dakota cattle producer, Reed Cammack, the drought meant surrendering years of genetics built by the family.
“We ourselves, last year, were forced to sell over 100 mother cows because of the drought,” he says.
Herd liquidation has led to the projected 2023 U.S. calf crop to be 2.5 million head smaller than the recent peak in 2018, notes Derrell Peel, professor and extension specialist for livestock marketing at Oklahoma State University, in a recent article.
Meanwhile, low numbers in the cattle cycle have pushed cattle prices into all-time highs, Rook reports, and these prices could stay around for a while as rebuilding will take time.
The August Ag Economist’s Monthly Monitor survey asked economists when they think cattle herd expansion will start to take place. The majority believe cattle contraction will continue for at least another year. Additionally, a smaller percentage think it could happen in the second quarter of 2024.
Echoing the sentiment, Cammack says, “How fast we’re going to rebuild? I don’t know—it’s yet to be seen. I think we’ll see good cattle prices for the next several years, as the herd rebuilding continues to create demand for high quality bred females.”
Despite the challenges, the recent Drovers State of the Beef Industry survey shows cattle producers remain resilient, with two-thirds of respondents calling themselves “optimistic” about the industry and its future.
Additionally, the survey found:
- 38% plan to grow their herd in the next five years
- 49% say their operations will at least stay the same in the next five years
- 54% of operations plan to add a family member in the next five years
- 10% say they considered exiting the business
- 66% say that exiting the business was never a consideration
The hope is this market will provide an opportunity for the next generation, Rook adds.
“That's probably the most exciting thing for me,” says Todd Wilkinson, president of the National Cattlemen’s Beef Association, “is that the young producer can think ‘do I want to go into the cattle industry,’ ‘is there a future for me,’ and suddenly there is. We're in a position where the cow-calf guy has leverage, and they have the ability to know that this thing looks pretty good for a number of years.”
