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Time to Invest in Genetics

July 24, 2014
BT Rotator Bulls Sale 7
With beef prices high it's time to invest in better genetics, University of Missouri economist says.  

With beef prices high it's time to invest in better genetics, University of Missouri economist says.
By: Duane Dailey, University of Missouri

"With record high beef prices, about anything works," said Scott Brown, University of Missouri economist. "It's hard to make a bad decision."

Speaking at a national meeting of animal scientists, Brown warned of low prices ahead. "In cattle cycles prices go up-and down. With volatility, rebuilding cow numbers will face challenges."

In times of good prices, invest in improvements to make beef herds better, Brown said.

Low prices are not in the immediate future. Time remains to rebuild U.S. cow numbers with quality that meets consumer demand.

This year, calf returns top $400 per cow, according to the Livestock Market Information Center. "We've never seen prices like this," Brown said. High prices are expected to continue through 2015 and beyond.

"Cattle producers can take a lesson from corn producers," he said. "High prices do come down. We'll work on changing demand and supply until prices drop. The industry will adjust."

With high prices, it's easy to not change anything. By planning now, herd owners can prepare for low prices ahead.

The U.S. beef herd has declined for six decades, sinking from 132 million cows to 88 million.

Herd owners are responding to high-price signals. They have saved heifers for breeding at a rate similar to a herd upturn in the 1970s.

"We can build cow numbers quickly," Brown said. "That is different than building beef supply quickly. It takes time to bring calves to the feedlot, packing plant and finally to consumers.

"We don't need 132 million cows again, as we produce more beef with fewer cows."

Beef supply will be short for some time, which supports continued high prices.

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RELATED TOPICS: Calves, Cattle, Genetics, Beef News

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