The cattle industry continues to shrink. What are the ramifications?
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USDA’s 2013 cattle inventory report is right around the corner. It will most likely reveal the 17th year of contraction that began back in 1997. To compensate for the loss of numbers, the industry has become increasingly productive. That is, carcass weights have steadily increased (just over 5 lbs./year) during the past several decades.
That productivity growth is the result of several factors, including better genetics, improved nutritional strategies, use of implants and beta agonists, and better overall management throughout the industry. The impact is dramatic, as the increased weight has compensated for smaller inventories.
While actual cow numbers have declined, the effective inventory (adjusted for heavier carcass weights) remains largely unchanged. In other words, 29.9 million cows in 2012 produced approximately the equivalent of 34.5 million cows in 1997. The primary question going forward, though, centers on how far that industry trend can be extended. What’s more, smaller numbers also possess a real impact on the industry’s infrastructure and service industries.
How do you see the inventory and weight trends playing out in the next several years? What impact will that ultimately have on the beef sector? Leave your thoughts in the comments section below.
