Agricultural News
Iowa State Ag Economist Lee Schulz Finds Today's Choices Impact Tomorrow's Profit
Tue, 24 Nov 2015 16:24:28 CST
Right now the nation has the youngest, most productive cowherd since the U-S-D-A started tracking heifer retention data. Iowa State ag economist Lee Schulz says that's an opportunity.
"You know while we're increasing the herd numbers, you know it is very important to increase that genetic merit, that genetic potential but along with that, increasing numbers as well," Schulz said. "And so I think you know it is very much a balance between getting the superior genetics in the herd, but also increasing beef production along the way."
Recent trends show that consumers will pay more for better beef. That can be a guiding principal while cattlemen and women start to rebuild numbers.
"You know it's a very high quality product that that you know consumers have been willing to pay for," Schulz said. "And so we've seen really the growth in beef demand has not been a per capita consumption. We've seen decrease in consumption, but we've seen higher and higher prices paid for, for that product. And so to get that high quality product, you need high quality animals and also animals that are going to perform in a lot of different conditions and be high revenue values in a lot of different conditions."
Last fall, Schulz analyzed auction market data and found that even in times of high prices, higher quality, known Angus cattle were worth more than their contemporaries.
"You know what really, you know, came to the forefront for me was seeing the premium changing over time and increasing consistently over time even being the record this year," Schulz said. "And what I think that really points to, even at record high prices, we're still even adding a premium on top of that."
Adequate moisture and moderate feed prices should bring rapid expansion in cattle, but the economist says today's decisions will impact a cowherd producing for a future only now taking shape.
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