Duane Lenz, is general manager of the leading industry analytics firm, CattleFax, and during the Oklahoma Cattlemen’s Association’s 66th Annual Convention held recently in Norman, Okla., he spoke with Radio Oklahoma Ag Network Associate Farm Director Carson Horn, offering a comprehensive overview of the beef industry including his own professional outlook on the expected future performance of beef markets for the balance of this year and into next. As for the first half of 2018, though, Lenz says things have been pretty good for the US beef industry.
“It’s been a pretty good time for the cattle industry,” Lenz began, in review of the current market situation. “Feedyards are starting to lose a little bit of money but stocker operations have been profitable and cow/calf folks have done really well this year - prices hung in there better than we though. So, overall it’s been a good year for the industry.”
However, the recent released of the USDA cattle on feed and cattle inventory reports confirmed that the industry is facing a period of larger beef supplies coming down the pipeline that will somehow have to be worked through. All thanks to the ongoing, yet moderating expansion of the US beef cow herd. Lenz says producers will be faced with the results of herd expansion that has been ongoing for the past two to three years. In order to absorb the larger supplies expected just over the horizon, Lenz insists the industry will have to continue to aggressively move more cattle year-over-year. Luckily, therein lies the good news for producers as worldwide demand for US beef has been remarkably resilient this year and Lenz believes it will continue as long as the economy remains strong to support current price levels. However, the matter becomes more complex when you consider the bigger picture which brings into focus increasing competition from other major proteins like pork and poultry. To ensure its place on top while staying ahead of the curve - Lenz insists the industry will have to be innovative, work with new products and market aggressively to consumers in order to stir the demand that will keep meat moving. If done right, Lenz says the beef industry should be able to coast through the next few years comfortably as the herd expansion levels out.
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