Strong consumer demand continues to support the cattle market, even as producers manage historically small herd numbers and tighter supplies. Ethan Lane with the National Cattlemen’s Beef Association says demand remains one of the brightest spots in agriculture today.
“But our frustration has been that the president and his advisers don’t seem to recognize the fact that strong beef demand and continued consumer enthusiasm for our product, even at the prices that we’re seeing today at the retail counter, are not a bug that needs to be fixed in the system, but in fact are the result of a decades-long effort to build a relationship with consumers to increase quality in beef sold in the United States and produced in the United States. And we’re reaping the benefits of that in the cattle production supply chain now. So it’s been really frustrating to see the White House view those strong prices and strong demand numbers as a problem to be fixed, rather than to recognize it as one of the few bright spots in the ag economy right now.”
As cattle inventories remain near multi-decade lows, Lane says the industry has become far more efficient in producing beef.
“So as far as beef supply goes, I think that’s something that has been focused very heavily on herd size. You know, 75-year lows, we’ve heard so much about that herd size number, particularly with the added frustrations of drought and the southern border closure due to New World Screwworm. But the reality is we’re producing more actual beef in the supply chain than we were 10 years ago. We’re producing as much or more today than we were in the 1970s with 30 or 40 percent less cattle. And that efficiency, the carcass sizes that we’re seeing, the added beef on those carcasses, equivalent to about a million extra head in the system last year, if my numbers are correct.”
Those supply dynamics are creating challenges throughout the supply chain. But Lane says cow-calf producers are finally seeing the benefits of stronger cattle prices.
“Even if it is a great time to be a cow-calf producer and have those calves to market, you know, everyone else down the chain is feeling the pinch as they have to pay more for those cattle. But, you know, it’s one of those things where our cow-calf producers have certainly spent more than their fair share of time on the losing end of those transactions. So it’s incredibly frustrating to, again, see people feeling like cow-calf producers getting a bigger check is somehow a flaw that needs to be addressed, whereas we feel like it’s long past due for them to have some time to make some money and get some debt paid down and make some investments in their operations.”