Beefy industry not so meaty these days

Jim Suber

By A Contributor

Last week’s government report on the cattle inventory confirmed in detail what everyone already pretty much knew; that is, the nation’s cattle herd declined a great deal in a year.

What the industry observers added to the report might be worth more upon reflection than a set of numbers contained in only one year’s time and isolated from societal and cultural contexts of both here-and-abroad and now-and-later. The descent has been long.

To recap a little bit first: the herd at 90.8 million head is the smallest since 1952 when there were 88.1 million cattle and only 200 million of us, or the smallest herd in 60 years and 2 percent fewer than a year ago; the drought that clobbered the southern Plains was a main culprit, with Texas losing 11 percent down to 11.9 million head; Kansas lost 3 percent to 6.1 million head; Oklahoma dropped 12 percent of its herd to 4.5 million.

What the government didn’t say, but industry analysts did, was that this herd liquidation has been a long-term trend because the herd has shrunk 14 of the last 16 years. American consumers will have available for them to buy 3.3 pounds less this year than last year.

Exports, finally recovering from the mad cow debacle years ago, are expected to remain strong this year, just slightly less than last year’s levels. People overseas with money know a great food when they find it and they are willing to pay for it. Meanwhile, we complain and give an easy ear to any and all anti-meat rants, no matter the ranters’ agendas. But there are more forces to identify at work behind the numbers report.

The agribusiness community notes with emphatic tones that domestic demand is falling away and the companies that kill, process and ship beef have suffered very thin margins for a long time. Already there is talk of reducing the slaughter capacity. That means fewer jobs and less processed beef. Localization of slaughter places would require a meat shop on every street corner to replace modern kill plants, not to mention overhauls of environmental regulations and union attitudes. That ain’t going to happen.

The feeder cattle prices have risen dramatically, but so have the breakeven prices feedyards need to keep from losing money. The cattle are often going into the yards now as light as 600 pounds, no heavier than newly weaned calves back in the day.

Of course, the industry is saying that where there is feed and room, operators are holding back heifers for breeding. A buildup would be several years away. Again, the long trend has been down. Some think that the cow-calf rancher has suffered too long. Historically, the cow man makes very little — compared to grain farmers — herding cows and doctoring calves. Pressure on pasture prices by people wanting to flee the cities has for years made it impossible to support cattle production on newly-bought pastures. Grass and feed and water are getting increasingly difficult for herdsmen to find, and many operations have become fragmented into rented patches strung out for miles and with numerous landlords.

It’s really premature to forecast beef’s future in the United States, but I can see: a boutique domestic herd only for the super rich; a completely foreign source of mediocre beef sold as pre-packaged imports from South America and Mexico for fast food chains and lower-tier steakhouses; and the end of American ranching as we know it.

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