Consolidation
Is Consolidation Taking Place in Western Cattle Industry?
Thanks to a perfect storm, the U.S. cattle industry is struggling right now, with drought across much of the west and heartland, low commodity prices and high input costs.
In other locations of the U.S., ranchers and some operations have liquidated or consolidated in response the economic challenges.
Cameron Mulrony, Executive Vice President of Idaho Cattle says the Gem state may not be seeing a massive amount of consolidation, but acknowledged he’s seeing a shift, especially when it comes to the medium sized operations.
“Volume is kind of the number one price factor. You know, if you don’t have a truck load or a large lot it influences your price a little bit. Those mid-sized guys who kind of used it as a supplemental, some of them are starting to liquidate their operations and look at other options or put that money away and waiting until the market changes a little bit and then trying to get back in.”
Mulrony says he believes there’s still a lot that needs to be sorted out before the market starts to rebound.
“Just because I do believe there are people who can see the value of inventorying cattle when we come out the other side of this, hopefully next spring, and the prices are on an uptick. So, depending on what happens next spring, it could really influence the overall fallout of the last 1 ½-2 years of drought.”
