Value-based marketing for cattlemen with key drivers for 2015

I recently attended the Marshall Frasier Beef Symposium, put on by Colorado Livestock Association in honor of my Gramps. This annual symposium is for cattlemen and one of the main discussion points this year was about the cattle markets and what the key drivers for 2015 and beyond look like.  2014 was obviously a banner year for cattlemen with unprecedented prices and all segments of the cattle market remaining strong.

Tom Brink of Top Dollar Angus gave four key drivers for 2015 & beyond:

  • Corn
  • Continued tight cattle numbers
  • Relatively strong beef demand
  • Larger competing meat supplies

Corn. We’ve seen an obvious downturn in corn prices the past year because of large supplies. Cattle feeders are taking advantage of this and feeding high-quality corn. This might sound like a disadvantage for corn producers – while some are producing at the cost of production – but without corn, we wouldn’t have the markets, quality and prices for cattle and beef, said Brink.

Continued tight cattle numbers. The U.S. cowherd is growing. But slowly, as we’ve recently seen from the U.S. cattle inventory report. Total cows and calves are up 1% from last year. But that doesn’t grow overnight. Producers are trying to keep back more replacement heifers, but the cattle prices being high are tempting them to sell.

Relatively strong beef demand. Thanks to the U.S. Meat Export Federation, and support from state checkoffs, international beef demand is soaring. Beef demand continues to rise, especially has more countries, like India and China, have a rising middle class. Domestically, beef demand isn’t as high with strong competition from poultry and pork. But the beef checkoff continues to promote beef as a healthy protein.

Larger competing meat supplies.  While cattle numbers are growing slowly, pork output this past year increased 5.4% and poultry increased 3.9%. This drives prices for competing meats down.

What are the results of these key drivers? More opportunities for cow-calf producers. Which will hopefully equal a steady expansion, and eventual more head of feeders to consume more of our over-supply of grain.

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