In beef cattle game, too many producers leaving too many cards on table

US - Many beef cow operators are leaving too many cards on the table at the present time, which means they are falling prey to missed management practices and wasted leverage, according to Wes Ishmael, contributing editor to Beef Magazine.
calendar icon 17 February 2007
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Ishmael, who was the featured speaker at the recent Grass-N-Beef Research Review at the Central Grasslands Research Extension Center at Streeter, told producers the first thing that needs to be done in correcting this situation is to assess where the industry is today.

“Demand is the name of the game,” he said, “and the demand has been improving for the past few years, with the American consumers spending about $70 more each year for beef. However, about 18 months ago that situation changed, and we are now slipping backward.”

Consolidation within the industry is happening on many fronts as well. Ishmael noted that the latest Agricultural Census indicated there were around 796,000 beef producers in the U.S., which represents an 11 percent decline for the last Census in 1997.

Trends point to the larger herds continuing to get larger and the cattle producers are concentrating in certain geographical areas. Fifty percent of the cattle numbers are located in the Central Plains, with 32 percent located in four states - Texas, Oklahoma, Missouri and Arkansas. But Ishmael said he expects cattle numbers in North and South Dakota to grow in the next few years.

Concentration is occurring in other parts of the beef chain as well. Twenty-five feedlots feed 46 percent of the calves, four packers control 84 percent of the beef business and 10 retailers dominate 55 percent of the groceries sold in the U.S.

Knowing what the trends are in the beef business, Ishmael noted there are opportunities for the cattle producer in the industry. Differentiation is the key word - both in the areas of product and progress.

Source: Farm & Ranch Guide
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