Darrel Mark: Continued cowherd liquidation is concerning | TSLN.com

Darrel Mark: Continued cowherd liquidation is concerning

While cattle inventories at historically low levels generally get most of the credit for today’s bullish cattle market, University of Nebraska ag economics Professor Darrell Mark is concerned about the long-term implications continued herd liquidation will have on industry structure. This ongoing liquidation, he said, will lead to fewer feedyards, packers and cow-calf producers.

He’s also concerned from a demand standpoint. Commercial beef production is predicted to decline this year and next, while pork and poultry supplies are seen as steady to slightly higher. As less beef is produced, consumers will eat less and prices will rise. Higher beef prices could then cause consumers to shift from beef to poultry, he said.

“The biggest ‘if’ in this scenario is whether or not consumers will return to higher levels of beef consumption once retail supplies of beef begin growing, which will be several years down the road. If they don’t, the size of our industry could be forever reduced unless (beef) exports grow even more rapidly than they have been.”

While cattle inventories at historically low levels generally get most of the credit for today’s bullish cattle market, University of Nebraska ag economics Professor Darrell Mark is concerned about the long-term implications continued herd liquidation will have on industry structure. This ongoing liquidation, he said, will lead to fewer feedyards, packers and cow-calf producers.

He’s also concerned from a demand standpoint. Commercial beef production is predicted to decline this year and next, while pork and poultry supplies are seen as steady to slightly higher. As less beef is produced, consumers will eat less and prices will rise. Higher beef prices could then cause consumers to shift from beef to poultry, he said.

“The biggest ‘if’ in this scenario is whether or not consumers will return to higher levels of beef consumption once retail supplies of beef begin growing, which will be several years down the road. If they don’t, the size of our industry could be forever reduced unless (beef) exports grow even more rapidly than they have been.”

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