Keeping Cattle Markets in Perspective

It is all about keeping things in perspective — especially cattle prices — says CattleFax Market Analyst Lance Zimmerman. As the cattle market begins to transition from record high levels, there is still opportunity for cow-calf producers who meet the ever growing demand for quality.
Zimmerman: “Really every expansion we went through in the 1980s, 90s and the limited one we had in the 2000’s came when demand was declining. This is the first time we have an opportunity to expand the beef cow herd in an increasing demand environment — really the first time since the 70s. So we are going to go through this transition where the cow herd is responding. The cow herd is growing to these price signals. It is going to continue to grow. We know that those margins are going to contract at the cow-calf level but are going to grow at the retail end.
Zimmerman offers the following advice for cattle producers as they navigate the change in cattle prices.
Zimmerman: “So if we want to continue to command a higher percentage of that retail dollar way down at the cow-calf level, we need to do things to incentivize them to say, ‘We want more of that production.’ So as we talk to these cow-calf producers — it’s one recognizing that prices are going to be smaller. Two they don’t have to be as low as you think they have to be based on previous expansion that we went through. Three — how do we continue to increase demand. Both domestically through higher quality production — but also internationally through the opportunities that we can see both with our neighbors to the north and the south and in the Pacific Rim markets.”