Livestock Market Expert Predicts Eventual Brighter Cattle Outlook

December 10, 2008
Man speaking at convention
Dallas Mount, University of Wyoming Cooperative Extension Service educator, speaks to the more than 200 producers who attended the beef convention in Torrington.

The take-home message to producers about the looming cattle market from the director of the Livestock Marketing Information Center (LMIC) was advice straight from the Boy Scouts -- be prepared.

Yet the edginess of his presentation to the 200-plus attendees at the Beef Production Convention in Torrington was softened by his parting words: "These are not fun times," said Jim Robb, "but this is not a bad time to be in the cattle business."

Robb was the lead-off speaker at the recent eastern Wyoming/western Nebraska conference. The event was sponsored by the University of Wyoming Cooperative Extension Service (UW CES) and the University of Nebraska-Lincoln Extension. The beef conventions are held every other year. This was the third.

UW CES Educator Dallas Mount, who helped organize the event, said the most conference buzz came from presentations on developing wind energy on the ranch, and by Trey Patterson, chief operation officer of the Padlock Ranch near Sheridan, who spoke about key management areas and strategies that most affect profitability and functionality of livestock operations.

Robb sees eventual higher cattle prices, but producers are struggling now. He advised producers to know their cattle; be ready for volatility. "Corn prices will spike up and down," he noted. "You have to revise what you are doing every three months. If the corn prices are up, recognize that and be prepared for a management strategy for the next three months."

Three months is important, he said, reviewing the time prices took to stabilize after 9/11 and the bovine spongiform encephalopathy case in Canada. "You have to be managing within those time frames. You have to act quickly or plan to wait three months."

Beef cattle production is declining and the supply side will tighten, and the export market potential will decrease significantly. Along with this, total beef consumption is the lowest since 1959, and Robb predicts that amount will be lower next year. Consumers have quit buying expensive cuts and are buying more chuck, round and hamburger.

"This is a full-blown recession we are in the United States," he said. "Consumers have traded down. Restaurants are going out of business. We think the economy will get better next summer. By the fourth quarter of 2009, we'll begin climbing out of this. We are halfway through this economic meltdown with 13 to 15 months to go."


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