Cattle Fax Analyst Finds Beef Herd Expansion Looks Different TodayTue, 19 Jan 2016 11:37:16 CST
Donít be a ĎChicken Little.í Thatís CattleFaxís advice to producers when it comes to cattle prices. According to CattleFax analyst Lance Zimmerman.
"And really every single expansion we went through in the 80s, 90s and the limited one we had in the 2000s came as demand was declining," Zimmerman said. "This is the first time we have an opportunity to expand the beef cow herd in an increasing demand environment really the first time since the 70s. Thatís a little foreign to producers. A lot of us donít remember what happened in the 70s. So reminding them that prices are going to make a correction, but that doesnít mean that the sky is falling. We donít need to be Chicken Little. We donít need to panic. What we need to do is look for the opportunity thatís there."
Much has changed since the last expansion phase, and that bodes well for everybody in the beef community.
"Weíre producing the highest quality grade that we have since the early 90s," Zimmerman said. "And one of our big focuses as a beef industry today is whoís that next consumer? Whoís that next generation beef consumer? And today itís the millennials. If you think about a millennial being born from 1980 to the mid-90s that means that they are sitting here today eating the highest quality beef that theyíve ever had in their lifetime and that presents a lot of great demand opportunities for us going forward."
And what if all cattlemen and women aim for even higher quality?..... Even better for the future, says Zimmerman.
"Weíre not going to saturate the high quality market," Zimmerman said. "I donít think thatís possible. What itís going to do is itís going to buy us more opportunities. Itís going to give us a consumer thatís going to be more willing to pay at a price point thatís $5-6 a pound where maybe in the past theyíd of balked at that because we didnít have the quality return that necessitated paying that higher price."
This is a case where success begets success, he says. This video news is provided by Certified Angus Beef LLC and the American Angus Association.
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