High Inputs Look Fearful But May Provide Opportunity

Fodder for Thought

I wonder if we can change our production systems so we aren't dependent on high inputs?

Published on: September 14, 2012

Feed and fuel prices are high. Weather patterns are erratic and extreme. Recent data from the USDA Foreign Agricultural Service suggests that commodity prices could remain at historically high prices for the next decade.

Things have never looked so good if you’re a grain farmer. Meanwhile livestock producers who use these grains for a feed source are left scratching their heads, wondering how they will pay the steep input costs in the days ahead.

Scientists believe extreme weather events, such as the droughts, severe storms and wildfires will become more common into the future.

It all seems like things could not get any worse. Those beef producers who stick around for the long haul will have some serious decisions to make in changes to management and production practices.

With all of these potential challenges looming ahead, it seems to me it begs to ask this question: What will make a farm or ranch sustainable in the cattle business in the years ahead?

It’s important to remember the issue of beef’s ‘sustainability’ lies in more than just efforts to lessen our environmental impact. We must also consider our economic viability and the social acceptability of our efforts to our customers.

With this said, if we truly take our economic viability seriously, it makes me wonder how a production system designed to function on inputs like grain feeds and fuel, inputs becoming increasingly high-priced, can be sustainable in a potential future with volatile commodity markets and extreme weather patterns.

My feeling is some big changes are coming for the commercial cattle business in the years ahead. A business reliant on high-priced inputs with a depressed supply cannot function effectively for long.

On the other hand, businesses that can adapt to these market challenges stand to reap significant rewards as prices for meat and poultry are also set to trend upward in the next decade. In addition the growing demand abroad from the expanding middle class in developing countries presents the opportunity for significant increases in trade.

What the needed changes will be is hard to say just yet. I can assure you one thing, though; producers who willingly take an open-minded approach to management and think outside the box will be the ones who remain competitive.