Since the drought in the Southern Plains decimated many beef cow herds and consequently reduced our national beef cow herd by several million, we have steadily seen the industry rebuilding over time all the way through 2017. However, in 2018, expansion is beginning to look a lot different. Randy Blach of CattleFax explained recently the change of pace he has seen take place during the last several months.Click here to see more...
“We’re basically moving back here to a level where the expansion rate is flattening out,” he said. “We’re still expanding but at a much, much, much slower rate than what we were a few years ago. Exactly what we should be doing.”
By the end of this decade, Blach says he expects the bulk of this herd expansion to be mostly wrapped up. In the meantime, though, he says producers are having a hard time balancing things. Prior to the expansion slowing down, cows were being retained - very few harvested. Now, Blach says, the industry is beginning to see cow slaughter percentages increase. However, the market is failing to deliver producers adequate returns on their investment. Blach says the price of cows currently is at historically low levels.
“It’s hard to capture the full value of those animals, because we’ve got a lot more cows that need to be harvested than we have space available,” Blach said. “This is going to intensify over the next couple of years. Particularly when you are marketing cows at times when we’re in those peak runs. You’re going to see this cow market be pretty defensive in here over time.”