Cattle market advice: Make money on the way up, but manage costs

Cattle market advice: Make money on the way up, but manage costs

Cattle conference speakers discuss cattle market outlook, industry trends

Are red-hot cattle markets here to stay?

At the Texas A&M Beef Cattle Short Course earlier this month, Dr. Jason Cleere, Texas A&M AgriLife Extension beef cattle specialist, simply said: "I think there is a lot to look forward to down the road."

Related: Consider tracking key performance indicators to boost cattle profits

Dr. Derrell Peel, Oklahoma State University livestock marketing economist, said the cattle market may have topped earlier this year, but don't expect a downward spiral in prices anytime soon. However, Peel said to "prepare for lower prices" according to decades of past charts and data.

Dr. Derrell Peel, Oklahoma State University livestock marketing economist, discusses the cattle market during the general session of the Texas A

"It's been fun on the way up; it's been easy to make money on the way up," Peel said. "There still will be some good times ahead, but you're going to have to manage costs in relation to the market. It all goes back to cost management. Now is a good time to invest some of those good returns you've had to help manage costs over the next few years. That might be investing in (replacement) females or brush control. I'm still optimistic. The best cure for high prices is high prices."

U.S. cattle inventory was up 2.5% as of July 1, according to USDA-National Agricultural Statistics Service. Beef cow numbers totaled 30.5 million July 1 as compared to 29.7 million in 2014.

Other indicators include a 6.9% decline in cattle slaughter so far for 2015 as well as an 11.5% decline in heifer slaughter.

"That's pretty strong evidence we are expanding," Peel said.

Hot topics in the beef industry
A hot topic in the industry, Dr. Rick Machen, AgriLife Extension livestock specialist, said the recent ban lifted on imports from Argentina and Brazil will weigh on U.S.-produced grass-fed and organic beef markets.

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"It's quite likely some of these imports could compete one-on-one with some of the products you produce here," Machen said. He advised those who produce grass-fed and organic beef in Texas and abroad to manage costs and keep a watchful on the issue as it could affect business.

Related: APHIS approves regional Argentina, Brazil beef import

When it comes to food and beef, Millennials, those born in the 1980s or 1990s, they want to know who raised it, how it was treated, where it came from, whether it contains genetically modified organisms, the environmental impact and whether it is sustainable.

"They want somebody that is tied to agriculture, somebody they can trust to answer their questions," Machen said. "There is nobody better to tell our story than us."

Machen encouraged beef producers to tell their story about stewardship and stockmanship and "tell it as often as you can."

"Tell your grandkids to invite their friends to come out the ranch and tell your story. How we help the Millennials, the kids they are raising, is going to have a profound influence on who is inheriting the ranch on down the line."

Source: Texas A&M

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