Montana Ranching FAQ | Cattle Industry Trends

Montana Ranching FAQ | Cattle Industry Trends

Q: Are there trends in the cattle industry that Stock growers should know?

A. Gary Brester, MSU Ag Economist, shared some current research findings with us – these are preliminary and he will share the entire report when it is finished – but there were about 80 M cattle in US in 2011 – down from an all-time high of about 130 M in the late 1970s. The good news is that domestic demand is a little stronger today than in previous years, and foreign demand is also increasing – they have more money and their populations are growing (don’t hold your breath, this is slow growth).

But there are supply declines –drought in the past 15 years in various parts of the US has increased the price of hay. Also, ethanol policy has increased the price of feed grains…so folks are planting more grains in what were once hay fields. Studies are showing that there are also reductions in the availability of public and private grazing lands and, with higher productivity our cows are bigger so they require more feed. Livestock is labor intensive and labor costs have increased. The livestock industry has improved its production, but fewer outside inputs are decreasing access to supplies.

Odd thing to watch here – technology has enabled the crop producers to produce more efficiently (GPS, for example, lets them know where to spray more efficiently), but there is no comparable technology boost in the cattle industry. Also, crop subsidy programs make raising crops a bit less risky, and with no comparable program for cattle, producers are opting for crop production.

So, cattle production is down from its heyday for a variety of reasons, but rising feed costs, smaller availability of grazing lands, and higher labor costs are factors. On the up side, demand is rising. Stay tuned for the full report that Dr. Brester will be sharing soon.

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