What is in this article?:
For almost 20 years, I’ve coordinated a year-end review of the beef industry by independent cattle consultants. While opinions have differed significantly in previous years, these eight consultants concur that widespread drought was the major event in 2012.
For 2013, improved industry profitability will be dependent on the weather. Meanwhile, continued drought could be devastating, and students of history know that severe droughts are often several years in duration.
Animal-Agricultural Consulting, Inc.
Cattle numbers are at historic lows, but major droughts in the U.S. the past two years ensure that cowherds won’t begin rebuilding until the rain returns. Meanwhile, culling in beef and dairy herds is still increasing, thus decreasing feeder cattle supplies.
The world demand for feeder cattle significantly increased the export of U.S. feeder cattle in 2012, particularly to the Middle East. This factor, along with drought and increased culling, has reduced feeder cattle availability for U.S. feedlots.
In addition, reduced corn production in drought areas led to higher feed cost and increased costs of gain (COG). COG will be paramount in 2013, and alternative feeds will be in demand for growing and finishing cattle as a result of less corn in the rations. Feeding with alternative feedstuffs, however, requires a higher level of feeding management to maintain performance and decrease COG.
Asia’s demand for low-cost beef spurred India to become the major exporter of beef in 2012, while the U.S. will export less beef in 2012 than in 2011. Still, beef demand was strong in 2012, despite uncertain U.S. and world economies.
Reduced feeder cattle availability and higher corn prices historically have meant lighter carcass weights, but that wasn’t the case in 2012, as the average dressed weight in October was 880 lbs. This was due in part to fewer animals to feed, new technologies and U.S. beef demand. Traditional U.S. cattle feeding is rapidly changing to meet the demand for high-quality beef.