14 NEBRASKA CATTLEMAN January 2024 PRODUCTION ‘LET’S NOT BE LOBSTER’ Beef Industry Dynamics When Calf Numbers and Supplies Are Low CALLIE CURLEY | CONTRIBUTING WRITER High grocery store prices, low calf numbers, domestic and export market challenges and outlooks on the next few years – all of these topics were covered by a diverse panel during the Nebraska Beef Industry Scholars Summit in November. “Supermarket beef prices are between 4 percent and 32 percent higher, depending on cut and quality,” said Jessica Sperber, Ph.D., of University of Nebraska-Lincoln. “Year-overyear prices increased 47 percent on five-weight steers and 49 percent on five-weight heifers.” Why’s that? “Since 2020, we’ve seen a 7.7 percent reduction in beef cattle numbers across the U.S. – a drastic drop due to increased cull cows and fewer retained heifers,” Sperber continued. “Additionally, the percentage of heifers in feedlots is at 40 percent, now 10 percent higher than a normal year in the feedyard system. All of this together tells us one thing: We’re not in a rebuilding phase yet. We’re not retaining heifers yet, because a lot are going into the market as cattle on feed and we’re still culling cows.” So, how will the trends that have been observed in the 2023 marketplace flow into 2024 and beyond? What can be expected in the next three years for producers, feedlot owners/operators and for consumers? Exports and Domestic Markets As an agricultural trade representative at the Nebraska Department of Agriculture, Jordan Schlake conducts international export promotion activities, including governor trade missions. In 2023, those missions included Vietnam, Korea and Japan. As one might expect, there are more factors at stake in these export market explorations than domestic cattle prices in the United States – exchange rates and the positioning of major competitors are equally important. “Right now, the U.S. dollar is incredibly strong,” Schlake said. “We also have to think about our competitors, chiefly, Australia.” Schlake said that Australia is in an opposite part of the cattle cycle right now than the United States is, having already rebuilt their herd, boasting high inventories and lower prices. “We’re trying to sell our highest quality product and [Australia] is totally eating our lunch right now,” Schlake continued. “Some customers are still buying because they need our products on the menu; their customers demand it. But volumes aren’t what they were, and we’re hitting a wall on pricing.” Looking back on export figures for the first nine months of the year compared to last year, Schlake reports that every U.S. state is down in export values. Of that group, Nebraska is performing “the least bad” at just 8 percent lower compared to 20 or 30 percent lower in Texas, Iowa and Kansas, among others. “We are maintaining our position as No. 1 exporter again, but that just shows the resilience of our demand due to high quality, and we’ll continue to battle against the currently more affordable Australian products,” Schlake said. Identifying Key Demographics Creekstone Farms Premium Beef, based in south central Kansas, processes about 2,200 Black Angus cattle per day, serving retail, foodservice and international customers. “As a niche company in this industry, nowhere in our mission statement does it say we want to feed the world,” said Ryan Meyer, Creekstone senior vice president of procurement and marketing. “We want to feed the top 1 percent of income earners in the world.” It’s a different perspective on target audience, and, according to Meyer, it can largely be attributed to the company’s 20-
RkJQdWJsaXNoZXIy NTMxNTA5