(KMAland) -- The nation’s cattle herds are shrinking and that will intensify the focus on beef packers to increase harvest capacity, says Randy Blach, CEO of CattleFax, a global leader in beef industry research, analysis and information.
Blach was a featured speaker for the 2020 Virtual Cattle Raisers Convention online, which replaced the Texas Southwestern Cattle Raisers Convention cancelled in March.
During his presentation on the market outlook for beef cows, Blach analyzed some of the numbers from the past few years.
The January 2014 cattle inventory report showed we had 29 million head of beef cows. By July 2018 the herd expanded to 32.5 million head. Since that time, the numbers have decreased significantly.
“The cow herd right now is shrinking. Last year we were down about 350,000 head. We’re going to be down 300-350,00 head again this year it looks like. based on the dryness that we see in the west and just not really generating enough profitability for cow-calf producers, you need to anticipate we are likely to see one more year of downsizing in 2021.”
Blach says “it’s not unfathomable” the sector could see a million fewer beef cows in 2021 or 2022 than seen just two years ago.
Recent low beef numbers reduced packing capacity. Blach says increasing capacity could provide for growth in the future.
“We need to see some additional harvest capacity. The last 12 months have been a good example of that with the Tyson fire that we experienced last August, and then we followed up with the issues we’ve had with COVID-19. The industry is really vulnerable in that one area. When we’re able to add enough more capacity to where our leverage situation improves a little bit, I think that will allow us to see a little more profitability flow back throughout the industry.”