The cattle feeding sector has faced many obstacles and challenges during the past several years, including tight supply, volatile feed prices and escalating capital requirements. Across all sorts of industries and businesses, size of operation carries certain economic advantages.
Clearly, there’s been some consolidation within the U.S. feeding industry during the past several years, but there also remains a large number of smaller, independent feeding operations. This situation is best evidenced by the steady percentage of total marketings resultant from those feedyards with less than a 16,000-head capacity.
Meanwhile, the biggest change during the past several years has been a slight shift from the 32,000- to 50,000-head feedyards in favor of the 50,000+ head operations. Is this slight trend an anomaly or does it portend some larger reality occurring within the feeding sector?
There might be any number of explanations – or it might simply be due to happenstance. Nonetheless, it certainly merits watching in the years to come.
How do you perceive this trend? How might it play out in the next 5-10 years? Leave your thoughts below.
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