The nation’s cattle herd is shrinking

The nation’s cattle herd is shrinking and it leads one industry expert to believe it will put the focus on beef packers to increase harvest capacity.

In January of 2014, there were 29 million head of beef cows. Over four and a half years, that number expanded to 32.5 million head. CattleFax CEO Randy Blach told the Cattle Raiser Virtual Convention that number has recently been declining rapidly.

According to Blach, “The cow herd right now is shrinking. Last year we were down about 350,000 head. We’re going to be down 300-350,000 head again this year it looks like. Based on the dryness that we see in the west and just not really generating enough profitability for cow-calf producers, you need to anticipate we’re likely to see one more year of downsizing in 2021.”

He says that the sector could see a million fewer beef cows in the next two years, compared to two years ago.

Recent low beef numbers reduced packing capacity, but Blach says that reversing that trend could provide for growth in the future.

“We need to see some additional harvest capacity. The last 12 months have been a good example of that with the Tyson fire that we experienced last August, and then we followed up with the issues we’ve had with COVID-19,” he said. “The industry is really vulnerable in that one area. When we’re able to add enough more capacity to where over leverage situation improves a little bit, I think that will allow us to see a little more profitability flow back throughout the industry.”

The weekly choice cutout values spiked slightly following that August of 2019 fire, but the prices skyrocketed this spring as plants shut down across the country in response to COVID-19 outbreaks.