In his soon-to-arrive April "Stock Notes" column, Harold Harpster nailed the reason why the U.S. beef herd isn't growing. You'd think with sky-high beef prices that spring-born calves would be popping out in record numbers. But they aren't.
"Many aging cow-calf owners just aren't interested in expansion at this point in their lives," says Harpster. Why bring on the added work of more cows, then larger supplies and the inevitable price decline?"
Harold just might identify with that group. He's not as enthusiastic as he used to be about putting feed out at 5:30 on a cold winter morning before heading to his day job. And, slipping on the ice leaves a longer imprint on your head, shoulder or backside than it used to.
Another friend told me of two Montana brothers in the cow-calf business who are in their seventies, and have no one coming on to continue the business. And, they're being pressured to give up their land to big-buck "green spacers" of the likes of Tom Brokaw and Brooke Shields.
Then there's this from Farm Progress' Beef Editor Alan Newport: "Inputs have risen so much the average [cow-calf] producer still isn't making that much money, although a few are doing well.
"Second, startup costs are exorbitant, the first of those being land prices. That's why I've never entered the business in a meaningful way," says Newport. "You need to be rich to enter the beef business" – or have it given to you.
Texas economist Stan Bevers, who maintains the only beef standard performance analysis in the country, says overall profit needs to rise more before we'll see a lot of expansion. But he also worries we'll hit a point where consumers will balk. Not sure where that is.
Cattle-Fax says we'll start to see some herd expansion this year. Bill Helming thinks we'll have an industry diverging into a "hamburger" segment for lower-quality beef and a fed segment for the highest-quality beef.
The grass vs. corn model is more or less what Helming suggests. Newport thinks it's already coming true. More and more cattle are staying on grass longer and longer before feeding.
That makes sense and more than cents with $7 corn.
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