U.S. meat supplies growing
Cattlemen producing record amounts of high quality beef
Martha Blum, Agrinews (IL)
Apr 5, 2019
DIXON, Ill. — U.S. beef, pork and poultry producers are producing a lot of protein for consumers.
“There’s a lot of protein out there, and it’s not just pork and poultry. There’s a lot of beef out there, too,” said Lance Zimmerman, analyst at CattleFax. “Nearly every year from 2015 and on, our estimation into the middle of the next decade is there is going to be a new record high in protein production.”
With this much production, Zimmerman said, the infrastructure for slaughter is stretched, as well as the domestic demand and the capability of getting the meat moved globally.
According to the U.S. Department of Agriculture’s Cattle Inventory Report, the total number of cattle increased by 500,000 head from Jan. 1, 2018, to Jan. 1, 2019.
“The number of beef cows increased by 1 percent, or 300,000 head,” Zimmerman said during a presentation at the Illinois Cattle Feeders Day, organized by University of Illinois Extension.
“We’re dealing with the thralls of expansion, but the good news is year-over-year heifer numbers are starting to slow,” he said. “We still feel we can get to 32 million head of beef cows in 2020 or 2021 and then start liquidating the cow herd after that.”
That is a guess, Zimmerman said, based on the timing of previous expansions.
“Going back to the ‘70s, there is usually a five- to six-year uptrend in cow numbers and then a five- to six-year downtrend,” he said.
“This one has mostly been a downtrend from 2000 levels with a small peak in ‘05 and ‘06 and then went straight lower,” he said. “The expansion got cut short due to drought, poor margins and high grain prices.”
Therefore, cattlemen may expand longer than normal because they contracted longer than normal.
“We missed one of our five-year upcycles on that 10-year cycle,” Zimmerman said. “The formula for expansion is very simple — the cow-calf industry will keep adding cows as long as they’re profitable and Mother Nature gives them feed.”
For the last 20 years, Zimmerman said, on average, the cow-calf segment has been profitable.
“Today, the northern plains, through the Dakotas and into Montana and Wyoming are pretty close to capacity since they have added about as many cows as they want to,” he said...