If cow numbers don’t increase in 2014, one expert thinks we can kiss the cow business goodbye.
Kenneth Eng has had a ringside seat on the U.S. beef industry for the past 50 years. In fact, as one of the pioneering feedlot nutritionists who helped shape the face of commercial cattle feeding in the 1960s, it’s probably more accurate to say he was inside the ring.
So it’s with considerable perspective that he predicts 2014 could be a watershed year for the future of the U.S. beef industry. “If we don’t increase cow numbers next year, I think we can kiss the cow business in the U.S. goodbye,” he says.
It’s all about critical mass, Eng says. The past 13 years have seen relentless beef cow liquidation. From a high of 45.7 million beef cows in the U.S. in 1975, cow numbers declined to 35.7 million in 2000, and fell to a 2013 inventory of 29.3 million.
“Many experts are basing their herd expansion forecasts on weather, numbers and economics only. While it is true that drought and the increasing costs of inputs are important, the lack of expansion is also determined by other factors,” he says.
For one, land values have skyrocketed — the average land price was $1,090/acre in 2000, but swelled to $3,550/acre in 2012 for cropland, and $1,150/acre for pastureland. That, coupled at times with drought in some important cattle-raising areas, has prompted some operators to take the money and run.
“And who can blame an aging rancher population made up of individuals who have spent a lifetime in essentially a break-even business, with occasional profits coming from land appreciation?” Eng asks.
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Eng also sees a growing concern among some cow-calf producers regarding the pace of consolidation occurring in the packing and feedlot sectors. What effect will more consolidation have on producers’ bargaining power?
“Cowmen didn’t just fall off the turnip truck. They can see what has happened to the fat cattle market and the independent feedlot operator, where a cash market is often nonexistent,” Eng says.
If you want to hear more of Eng’s industry perspective, he will headline a symposium on cow-efficiency research to be presented by faculty from three universities Sept. 12-13 at the University of Nebraska-Lincoln (UNL) Johnny Carson Center. The noon-to-noon event is the first of annual symposia that will detail research underwritten by a $2 million endowment by the Dr. Kenneth and Caroline McDonald Eng Foundation, which was established in the memory of Caroline. Other universities participating include Texas A&M University and Oklahoma State University.
Preregistration is $100, or $125 at the door. For more information, contact the Eng Foundation at 210-865-8376 (Kenneth Eng), 575-743-6331 (Annie Powell), or firstname.lastname@example.org. An agenda for the symposium is available at bit.ly/1aMwSUG.
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