What is in this article?:
- BEEF Reader Survey Finds Both Optimism And Concern
- Industry outlook is positive
- Both optimism and foreboding
BEEF readers have a strong positive outlook for the beef business in 2013, but are decidedly less optimistic about the nation’s direction.
Industry outlook is positive
However, when looking ahead at the potential in the beef business, BEEF readers are decidedly optimistic. When asked “What are your plans concerning your cowherd in 2013?” 38.5% say they plan to remain the same, 30.3% plan to expand by 1-10%, and 15.1% plan to expand by 11% or more (Figure 2).
Given the drought-induced liquidation of the past several years, those are optimistic numbers indeed.
And if BEEF readers are any indication, cattlemen have done all the liquidation they care for. Only 5.4% indicate they plan to decrease the size of their cowherd by 1-10%, and an additional 5.6% plan to cut back by 11% or more.
Only 0.5% plan to get out of the cow business (but not retire), while another 0.5% plan to hang up their spurs and take life a little easier than wrangling a bunch of cattle permits. Only 4% plan to keep their cowherd constant, but grow other enterprises such as stockers, retained ownership and commercial heifer development.
The majority of those planning to expand believe the future is bright. Of those producers planning to grow their herd, 66.9% are doing so because they see opportunity ahead. Indeed, with the smallest cowherd in more than a half-century, high calf and feeder prices will remain a bright spot in the business. Another 38.5% say they need to expand to remain competitive; with input costs naggingly high, many ranchers see the need to get bigger simply to stay in business (Figure 3).
And it appears cattlemen are going to expand the old-fashioned way – by retaining heifers. In fact, 81.6% plan to do just that, while 42.2% say they’ll buy replacements, and 10.5% will sell fewer cull cows. The total equals more than 100% because most ranchers will do some combination of all three in an effort to keep cattle in their pastures (Figure 2a).
Those planning to reduce operational size in the coming years attribute it to several factors. Most are still dealing with the devastation of drought, with 54.7% listing that as their reason for cutting back. Close behind, at 47.2%, is the producer’s age, followed by high input costs for feed, fuel and labor at 43.4%, and an uncertain economy at 28.3%. Another 18.9% say they’re unable to find good help, 11.3% say row crops are competing for the land, and 7.5% have other reasons (Figure 4).
The majority (52%) of those who plan to just keep on keepin’ on at their present size say they have enough land and cows for their present situation and don’t want to hire additional labor. Another 39.9% say they’ll maintain the ranch regardless of market ups and downs. However, 11.4% see better times ahead, but don’t plan to either expand or cut back. And 9.7% have other reasons.
While a small number of respondents say they plan to exit the cattle business, they plan to keep the land in production. A total of 30.8% plan to keep the land but not raise cattle, while 30.8% will rent the land to a family member. Another 23.1% will rent the land to a non-family member, 7.7% will sell the land to a family member, and 7.7% will sell to someone outside the family.
The big three trifecta of government regulations, drought and high input costs were the reasons given for exiting cattle production. Overregulation was the number-one factor at 53.8%, with drought at 42.3%, and high input costs at 38.5%.