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Cattle Expansion: When and Where Will It Happen?

August 15, 2014
By: Betsy Jibben, Ag Day TV National Reporter
BT Florida Commercial Cows Calves 2
An area prime for expansion is the Southeast. "What we will see there is a return of pastures. That area is in good shape with regard to more moisture. We will see expansion in southeast," Hurt says.  

The nation hasn’t seen such a small beef cow herd in decades. The last time the beef herd was this small, John F. Kennedy was still president. For producers who survived the tough drought years, many are focused on starting to rebuild. The question is, how long will it take?

"I think this will start slow. It’s going to take seven to eight years to rebuild. I think six to eight in the futures," says Purdue University Ag Economics professor Chris Hurt.

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Hurt says to expect the expansion to start in the Northern Plains. It’s a region where beef cow numbers did not decline over the past seven years.

"We have a lot of marginal land in that area and now there is a profit incentive in that area. We see that shifting," Hurt says.

He says the main transition is turning that corn back into pasture, something that will take multiple years.

"I think over time we will actually hear some talk—it's not a vast amount of land, but there is going to be some land that shifts out of crops into pasture land," Hurt says.

Hurt says the western Corn Belt from Minnesota to Missouri lost 566,000 cows, which is 15% of the national reduction. It has a good chance of rebuilding, but the challenge there is convincing producers to go back to cattle after turning to grain production in the ethanol business.

"Many in Iowa and Minnesota have gotten used to just hauling their grain to the ethanol plant and I think it's going to be harder to convince some of those producers to move back into the cattle because they've gotten used to the cash grain production business," Hurt says.

A third area prime for expansion is the Southeast. The region took a 21% hit of the nation’s total.

"What we will see there is a return of pastures. That area is in good shape with regard to more moisture. We will see expansion in southeast," Hurt says.

But the main concern is in the Southern Plains, which accumulated 1.6 million of the decline. Texas alone had the biggest reduction of 1.4 million head. That’s 26% of the nation’s total decline. Hurt says the Southern Plains need to get out of drought before they can even expand.

"Eastern Texas is a very important cattle area; we're probably going to see expansion there. Central and western Texas is still pretty droughty. We probably won’t see expansion in those areas," Hurt says.

Expect a slow expansion in the West, too.

"In California, we are continuing to see drought. Two percent of the nation's beef cows are in California," Hurt says.

Hurt says Missouri is the best state to rebuild because they have the most marginal land. Hurt says in 2007, we were supplying beef with $2 corn. He says that cheap corn is what it will take for beef producers to reach back up to pre-drought numbers fully again. Of course, $2 corn creates its own set of challenges for grain producers.


 

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