“For producers here through the central and southern plains, the drought has put a lot of stress on their operations. We’ve seen large numbers of cows going to town. The numbers of cows being processed in this region of the country are up 11 to 12% for the year, so that’s been the difficult part of it, but in spite of that, our calf market has stayed strong.”
Prior to the last 4 or 5 years of good prices, the U.S. cowherd went through an 8-year liquidation. That reduction in numbers was one factor that strengthened prices. Randy Blach is the CEO of a cattle-marketing company.
“It was the same time we had record growth in demand. Beef demand grew 25%. We look out here today, we’re still consuming the same amount of beef we were consuming 10 and 15 years ago on a per capita basis, but our consumers are willing to spend another $75 per person, and that’s why we’re seeing the profitability in the business.”
Increased demand was the result of strong product development and marketing efforts from the beef industry.
“The product is more differentiated today. It has more quality. We’ve taken out some of that halo effect. We don’t have the external fat on the product and yet we still have the eating quality and the marbling in the product.”
Key export markets are starting to re-open.
“We expect they’ll have the biggest year in history going to Mexico. Japan has just opened up here in the last week. We hope South Korea will be open here in the next month. As we grow our production in this cycle over the next 4 or 5 years those markets are going to be critical for us.”
Blach is encouraged about future markets
“Everything we see out here suggests we’ve still got some very good times for these cow/calf producers ahead of us.”
But also key for the cow/calf producer is cooperation from Mother Nature…grass doesn’t grow without rain. I’m Joe Brown, tracing the journey our food makes from the farm and ranch to our tables, From the Ground Up.
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