Tag Archives: cattle producers

Cattle Producers Navigate Inventory Challenges

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Atlanta, GA |

According to the USDA, for the first time since 1951, the US Cattle inventory has dropped to its lowest point as producers across the country deal with a plethora of issues such as record high input costs mixed with harsh droughts that left many producers in a bind.

“A lot of that has to do with weather. The fact that much of the U.S. was in drought for a large part of last year caused a significant amount here in Georgia, especially in Northwest and Southwest Georgia. We had a lot of producers that had to start feeding hay significantly earlier than what they would normally do, and that’s caused a lot of additional culling, but also it was an increase in prices that we saw. We have a lot of producers that are able to take that opportunity,” says Dale Sandlin, Executive Vice President of the Georgia Cattlemen’s Association.

As a result, Sandlin says cattle prices will be on the rise in the coming months, however, the question is whether or not producers will be able to hold on for those higher prices as expenses are higher than ever.

“One of the effects that that our cattle producers here are going to have to look at is can they afford to feed these cattle and hold on to them long enough to take advantage of the higher prices? They’re projecting that the prices will stick around somewhere through 2025 and possibly even into 2026, depending on the build up, but a large number of producers are having to deal with higher input costs they saw last year. That’s weighing in on the profits that they received on that this last batch of cattle. So, if they’re able to hold on to them and feed them longer, I think those producers will be rewarded for those efforts,” says Sandlin.

Sandlin believes that for those producers that can hold on and don’t sell out, it will give them the opportunity to improve their herds, as they can focus on rebuilding, but says that will also be contingent upon the weather and forage quality returning back to normal.

“I think we’re going to see a measured approach coming back from this lower inventory number. It’ll take longer to rebuild the herd, and a large portion of that, too, is going to be the weather. If we don’t get good rains here in Georgia and we don’t have forage increasing, we’re not going to see a lot of producers that are quick to go back and rebuild the herd. One of the things that you’ll see for this generation of producers that are in it for the long haul, they’re going to be taking the higher prices and profits that they received on that and putting that back into the into their farms and operations. That’s setting up the next generation for quite a bit of success in doing that. The trick is being able to do that in coupling with higher input costs as well as making things work. You’re also seeing a lot of culling of the herds right now, largely dependent on the quality of the cattle that they’ve got. And so while those producers have got a little a little bit extra funds in their pocket, now they’re taking this opportunity to improve the herds, improve their genetics, to reconsider some of their stock and breeding stock and making sure that they’re setting up that operation for the long future,” says Sandlin.

By: John Holcomb

Will High Beef Prices Stick Around?

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Athens, GA |

It’s been sticker shock for customers browsing the beef section of their local grocery store over the past few years with prices reaching record high levels. That trend is likely to continue this year with inventory taking a dip.

“So, in 2024, cattle prices should be very high. We should continue to see the trend that we saw in 2023 where we saw prices continually higher year over year. In 2024, we expect that to continue where we see prices higher year over year,” says Will Secor, Extension Livestock Economist.

However, that had yet to curb the demand. In fact, the amount of beef being eaten domestically continues to rise.

“Despite those really high beef prices, we actually see consumers consuming more beef per person in the US. We have pretty similar real prices, normal prices for beef in the retail sector for the past couple of years as say maybe where we were in 2014 or so. We’re actually consuming a few more pounds per person in the US,” says Secor.

As for when consumers can expect to see a bit of relief on the prices, that won’t be for quite some time with herd contraction predicted to continue.

“We’re expecting probably about a ten year to eleven-year cycle on average when we look at the history of cattle inventory numbers. What that means is we just hit year ten. So, we’re going to be moving into year eleven in 2025. So, we expect probably sometime around 2025 for those numbers to bottom out and start to move higher form there,” says Secor.

Just how high those prices get might determine the future of the cattle market.

“Once we start see beef prices this high, we’re really kind of testing the consumer’s willingness and ability to pay for beef. The question mark is, especially if we hit any kind of macroeconomic concerns like a recession or higher unemployment, then we might start to see the consumer start to pull back from beef and maybe go to other cheaper protein alternatives such as chicken or pork,” says Secor.

With all those economic uncertainties, cattlemen could mitigate some of that risk by taking advantage of the current prices.

“Cut costs where you can, but don’t cut corners. Then, also think about with these high prices, where are opportunities to lock in and protect from any kind of downside price risk. So, thinking about all the different price risk management strategies that they can take advantage of, what fits their operation and how can they use those to manage some of those risks and take advantage of these higher prices,” says Secor.

By: Damon Jones