The future of the cattle industry

[Jogeephus]

I was at a meeting today where there were some leading members of the cattle industry. Once the main portion of the meeting was over, a discussion came up about where the cattle industry was heading. Being a dumb redneck, I kept my mouth shut and listened to this discussion and was amazed at some of the things that were mentioned. Out of curiousity, how do you see the future of the cattle industry. I mean, what do perceive it being in say 15 or 20 years? I guess I'm wondering because I'm the type of person who probably looks at the trees more intently than the forest.

 

[mnmtranching]

Joe, I believe with the competition for land and the increasing cost of production. Beef production will drop by about 1/4 in the next decade. Beef will still be a popular US food. South America will furnish the beef at a cheaper cost to the American consumer.

 

[Wewild]

I worry that MM is right.

 

[larryshoat]

I worry that MM is right too . That is one reason that I'm in favor of mandatory COOL .I think we will continue to be high cost producers, but I think we offer quality that the consumer will pay for given a choice .The big money people don't want the consumer to choose or even know they have a choice .Unfortunately I think our farm orginizations ( the ones that are supposed to support us ) carry water for the big money people .

Larry

 

[Caustic Burno]

Texas A&M put out that the average herd in the state of Texas was 25-50 head and the average cattlemans age was over 50. All the farming groups were over 50 the exception, I can't remember if it was the poultry farmers or hog farmers and it was just under 50 . I see most all of the average size farm ranches disappearing due to age and cost/profit margins.

 

[Jalopy]

I think that we will still have the best grain-fed beef at the highest price for those that can pay for it. However I think grass fed beef will develop further and become more widespread than just the niche market it has today. I could really go into what ifs and maybe's but this post is enough for now.

 

[mnmtranching]

Yup, I believe there will still be a demand for the prime and top choice. But like a Cadillac, not readily affordable to the average person, except for special occasions. Most of the imported US beef now is grassfed. And I'm just not sure COOL would make a impact. $6. vs 4 hamburger for instance? all but a few will go for the cheaper. I think those that can raise a good grass fed product have a great future. For me I look at how much land and how long it would take, basically two grazing seasons and what? through Winter? Might be what I'll have to do. Cut the cowherd in half and raise all young stock to slaughter. Two grazing seasons and finishing on corn silage :idea: I have been thinking on this for a while.

Think it might work?

 

[bigbull338]

with the population growth.an the housing boom.causeing the land to go up sky high.an developers buying the land.all this will force the cattlemen an farmer into a corner.as far as having the land to make a living on.an it will force alot of people that think they can get rich in cattle.an leave only the stubborn diehard cattlemen.all the while or expenes an land taxes will keep going up.i think to itll hitt a nitch as far as people coming to the cattlemen looking to buy a calf for beef.because the stores will get to high on their beef.

 

[john250]

Jo, you ask for a 15/20 yr outlook, and my crystal ball just isn't that good. I'm struggling with a 5 yr forecast.
Fewer cattle, almost certainly. I'd say the trend toward fewer operations with more cattle will continue. And, at the same time, operations with a few head will increase as long as there are decent off-farm jobs available.
Seems to me our whole structure may change because of trucking costs. We could see some feeding return to the corn belt states from the great plains. Closer to the ethanol plants. IF a person can get a permit to have a feedlot in the corn belt these days.
Grass fed will stay a niche, I think. Land around here (USA) is too high priced to take 2.5 yr getting a steer fattened.
I think we will import a lot more beef. I don't see how it can be any other way. South America can make money on a beef that doesn't break even here.
US producers need to market our product as "premium". I'm not a marketing whiz, but if you can sell bottled water, you ought to be able to sell home grown-tasty steaks and burgers.
Just this morning I heard someone on public radio repeating the old vegetarian line that says all that grain would feed more people if they ate the grain directly. I'd like to ship that guy a bag of #2 yellow corn and tell him to have at it. Still, we can expect ever increasing pressure from those folks.
Just a couple thoughts I have had.

 

[flaboy]

I think the problem is two fold.

1 st. The sheer cost of doing business in the US rises every year. It makes it harder and harder for us producers to make a decent profit. I think many will just give up sell the land and do something else.

2 nd I think many of us on this board came from a cattle/ranch/farm background and it's in our blood and we enjoy it. I think today's generation (including my own son) thinks it's too much work, to hard of work, not worth it, and/or boring. I think a lot of family farms will disappear when some of us are gone.

 

[CattleHand]

not the same topic but as always some people had some interesting opinions

viewtopic.php?f=8&t=46050&start=0

 

[Jogeephus]

Thanks for the replies. All of you touched on what was said in the discussion so I'm going to assume that much of what was said is legit. Their reasoning and data they tossed out made their forecasts sound all but inevitable which was somewhat unnerving to me. Kind of a wake up call for me to reevaluate my strategy if I intend to stay profitable.

Though no one said the cattle business would ever end up being integrated like the pork or poultry industry, it did sound like the consolidation of the processors will give them more power to dictate what they will be willing to buy - at least at a price that the producer can make money on. It also sounded to me that the "just because it is black it is beautiful era" reaching its end as they mentioned several little mentioned breeds which are bringing huge premiums in niche markets. Some of which are backed by very strong non ag organizations that have unlimited access to press.

What also shook my boat was when one man who normally had a standing order for his 3000 calves was told by his buyer that they didn't know whether they would purchase them this year. Buyer told him he didn't know what they were going to do.

I walked away with the impression that the average commercial cattleman has just a few options. A niche market, branded beef program or raising trailer lot loads and if this is not possible - they are going to have to form an alliance with other local cattlemen in their area to make this happen.(God forbid cattleman working together to the tune of a single drummer ;-) ) I'm all ears to any other ideas cause these folks got my attention.

 

[john250]

I am glad you raised the question.
I would like to see more responses.
Is anyone expanding? Adding cows? Hay acres? Why?

 

[Wewild]

I walked away with the impression that the average commercial cattleman has just a few options. A niche market, branded beef program or raising trailer lot loads and if this is not possible - they are going to have to form an alliance with other local cattlemen in their area to make this happen.(God forbid cattleman working together to the tune of a single drummer ;-) ) I'm all ears to any other ideas cause these folks got my attention.

Good post.

We are getting to the point that if we don't change our technique's on selling our beef, we are only going to have big ranches and what some call hobbiest.

 

[Jogeephus]

I am expanding John, that is why this casual conversation I happened into was so unnerving to me. With the exception of myself, the average person in the group had no less than 600 brood cows. (Which is another reason I kept my yap shut) Hearing them talk about what they were seeing unnerved me somewhat cause I don't cotton to change very well and change seems to be in the wind. But I'll do what I got to do if I can just figure out what that is. (Hence I turn to my esteemed colleagues on the board) :tiphat:

 

[Caustic Burno]

I am glad you raised the question.
I would like to see more responses.
Is anyone expanding? Adding cows? Hay acres? Why?

I can't see expansion right now as it is hang on time here.
I am still working on conservation ideas, tractors don't crank up around here anymore unless there is a days work. I make a list and when I have a days worth then we get it. I have made a skid tank that slids in the bed of the mule I am spot spraying with and has a boomless sprayer to spray the fence rows. Truck is limited to one trip to town per week so plan the things I need the truck for and get in that trip. I am looking at planting 15 acres in millet with the bahia to increase hay yields and cut tractor time in the hay field.
I am only ferilizing the pastures that need it this year. Fuel and fertilizer cost are my biggest cost, also rotational grazing this year.

 

[Jogeephus]

I am glad you raised the question.
I would like to see more responses.
Is anyone expanding? Adding cows? Hay acres? Why?

I can't see expansion right now as it is hang on time here.
I am still working on conservation ideas, tractors don't crank up around here anymore unless there is a days work. I make a list and when I have a days worth then we get it. I have made a skid tank that slids in the bed of the mule I am spot spraying with and has a boomless sprayer to spray the fence rows. Truck is limited to one trip to town per week so plan the things I need the truck for and get in that trip. I am looking at planting 15 acres in millet with the bahia to increase hay yields and cut tractor time in the hay field.
I am only ferilizing the pastures that need it this year. Fuel and fertilizer cost are my biggest cost, also rotational grazing this year.

I agree with you CB, I chose the wrong word. I'm not expanding at the moment but I did expand just before everything went to hades. Now I'm saying OH SHUT, now what do I do. Heck, I thought if I could make it through last year's drought I could do about anything. Now I'm smoking this thing over real hard. I'm not way out on a limb here but I am going to have to have to work smart and conserve where I can. If my play works out and prices don't go down the tubes I'll be in good shape. If it goes south, I'll take a blistering but will get up and shake it off. I just wish things would stabalize some. You just can't plan anything with fuel and fertilizer bouncing all around.

 

[Caustic Burno]

Jo don't feel like the Lone Ranger my Cow account is lower than it has ever been with today's prices.
The day it goes red I am though, if things hold we will still be in the black. I was looking at the salebarn prices today and they are falling here not good.

 

[skyline]

I'm going to try to post an excel spreadsheet that the Texas A&M folks prepare for the East Texas cattle market once per week. (Couldn't make the attachment work - I can email it if anyone is interested in seeing it.) The trend doesn't look good. 500# steers are off by 20 to 25 cents per pound from this week last year. Prices down, expenses way up. Not a good combination, any way you look at it.

One of the trends that we're seeing in Texas is ranches being bought out and taken out of cattle production. Ranches in Central Texas are being bought by sportsmen with no interest in cattle. They'll high fence it and manage the deer population. All the while driving the land prices up and up. My understanding is that cultivated crop land is worth less per acre than mesquite thickets (for deer hunting) in Central Texas. Oil and gas money is buying ranches right now. In East Texas the larger tracts of land are being passed down to the next generation (with no interest in cattle) and split up into little pieces. Very few young folks are interested in cattle and the ones that are cannot afford the land to do it on, unless they inherit it.

Not sure what that means 20 years from now, but it seems to me that it's going to be really hard to get started in the cattle business 20 years from now (on a decent size scale) if you don't inherit a bunch of land or bring a lot of money from another business. It makes me think that we'll see larger operations survive and fewer small herds in the more developed parts of the country.

 

[rockridgecattle]

Reading this thread, i was thinking on what to say.
A guy down the road kept his calves back and fed over the winter. The prices were in the toilet in the fall, so he gambled. he fed hay, silage, and grain all winter. I'm trying to remember what his weights were, i think 8-900#. 76 cents a pound. How do you make it work on that. After all the time, the feed, the fuel, the what ever else.
We are under 40 or i should say i am, hubby just over. Since the new year we have been thinking on selling out, doing something else. I'm thinking why should i bust my butt 24/7 to make ends meet. I'm not afraid of hard work, or the long hours. I love cows, they are a good line of work. Is it worth it? How much longer can we hold out 'till prices get better, when the packers can bring it in cheaper?
Not only that but, inputs are up across the board. Food in the stores is climbing in price. The average person is not going to be able to afford a roast, I know i could not at current prices. There might be a shortage of cattle in a couple of years, might drive prices up, but the price will be so high in the store no one will buy and the price will drop. Catch 22.

Signed,

a disillusioned cattle farmer