The nation's beef herd has been contracting for some time. Since 1970, beef cattle numbers are down 31 percent. However, larger frame sizes have caused beef output to actually grow 2 percent. That trend sputtered in recent years as high grain prices and then the 2012 drought caused beef farmers to step up culling due to cash flow issues. In the past two years, the beef sector hemorrhaged money as producers lost an estimated $143 per head, reported INTL FCStone's Ben Parks.
The culling trend may be nearing its end, as ranchers appear poised to add cattle in 2014 and beyond, reported Bert Rutherford in the December 2013 issue of Beef magazine. In that survey of 677 beef producers, 33.5 percent reported they would expand their cowherd by 1 to 10 percent in the coming season and 13.4 percent said they would expand by over 11 percent. The trend was fairly consistent across the country.
The potential expansion projected even higher when looking at the next 3 to 5 years as 55.7 percent planned on expanding. Showing incredible optimism, 24.5 percent planned on expanding by 11 or more percent. Heifer retention was the preferred method of growing the beef herd for 80 percent of the respondents, reported Beef.
How these intentions will impact beef prices is yet to be seen. Looking back, beef prices have gone up nearly 30 percent since 2010 and could rise another 3 to 6 percent in 2014, projected Lee Schulz, Iowa State ag economist.
