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Jan. 21, 2011 BrownfieldAgNews reports: Record feeder cattle prices are positive in the short-term. But University of Nebraska livestock marketing economist Darrell Mark is concerned about the impact on the overall cattle market structure. Mark says in an attempt to satisfy the short run demand for beef with a smaller cattle inventory, the industry has been slaughtering more females-both cull cows and bred heifers. "If you look at the ratio of females-to-male slaughter, you can definitely see in the last couple of years that we've been killing more females relative to males," Mark says. "It's not just because we've been killing more cull cows, but it's also because we've been killing fewer steers out of feedyards-and more heifers." Mark says the female-to-steer slaughter ratio has been increasing for the past five years-and was near 100 percent in 2010. "What I've noted, historically, over the last two to three decades is when you have that female-to-male slaughter ratio near 100 percent, you continue to see declines in beef cow numbers for at least the next two to three years," he says, "and you never tend to see much growth in cattle numbers until you see that ratio drop below about 90 percent. We haven't been below 90 percent since 2006." Mark expects the annual cattle inventory report on January 28th to show a continued decline in the nation's cow herd. He says the impact reaches beyond the cow-calf sector. "I think we've gotten pushed now in the last year or so to the point where we've got feedyards and meat packers running far enough below what would be optimal capacity utilization rates, that it's going to start having a bigger and bigger impact on them all of the time," Mark says, "in terms of how many shifts they run or how many employees they need-all those types of things and I expect to see that in both sectors." Mark says if the long run trend towards fewer cattle continues, there will likely be fewer feedyards, and fewer beef packers and processors as well. He says that could have a significant impact on the communities where they are located. Tweet |
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