CattleFax's Randy Blach Says Peaks and Valleys Will Help Cattlemen Regain Focus in 2016Thu, 04 Feb 2016 12:10:23 CST
The latest U.S. Department of Agriculture cattle inventory report shows an increase of the U.S. beef cowherd population to 30.33 million head. That’s an increase of one million head over one year ago. But USDA also reduced the cow number of January 1, 2015 by 400,000 head from 29.7 million head down to 29.3 million head. USDA showed a million head increase in 2015, but a smaller increase in 2014. CattleFax Chief Executive Officer Randy Blach said getting that number above 30 million head is a step in the right direction.
“I don’t think we would have had an industry that would have dropped the number of beef cows much below 31 and a half to 32 million head had it not been for the magnitude of the drought,” Blach said.
A year ago, Blach thought the industry could handle those levels as long as demand stayed close to current levels. He said there could be a two to three million head increase in the number of beef cows through this expansion phase. He is comfortable in getting back close to 32 million head, but one unknown is the shaky global environment.
“That will pass too,” Blach said. “You know all these markets correct. All markets correct and this is what we are seeing around the world.”
In coming out of 2014, life couldn’t get any better with record cattle prices. Blach said the market went from euphoria to panic and fear when the cattle market crashed in the second half of 2015. He said hopefully we were reminded that we make money at the point where we buy cattle, not where we sell cattle.
“That would be the physiological move that you go through in markets from peaks and valleys,” Blach said. “There’s great opportunities in our business and our industry, but we’ve got to be business like."
Blach said cattle producers weren’t very businesslike in 2015 in buying cattle that would lose $100 to $150 a head, which doesn’t work well in this narrow margin business. That’s a trend he has seen a lot during his 35 to 40 year career. Every time the market goes through big profits, he said producers tend to get carried away and go through this big equity drains. CattleFax data suggests the industry has given back $5.1 billion. That’s equal to the profitability made in 2013 and 2014. Blach said we’ve never seen anything like that. In 2016, he looks for producers to regain their businesslike focus and that is one of the main things that will stabilize the market.
Radio Oklahoma Network Farm Director Ron Hays featured Blach on the Beef Buzz feature. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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