Near Term Outlook is Much Improved

by Nate Smith, General Manager, Top Dollar Angus, Inc.

In the last two years, we have seen four major records set – three of which affect our beef industry in a big way: 1) the quickest interest hikes in decades, 2) the lowest beef cow inventory in 61 years, 3) the highest fed cattle prices ever recorded and 4) one of the worst droughts in memory finally easing up. What a wild ride! It was a slugfest the past few years in the beef industry, but if we pick apart where we are now, the future looks bright.

Inflation and interest rates affect all of us, from the cow-calf producer to our end customers at the grocery store. Let’s start there. Luckily, the beef market was able to thread this needle well. The industry had a large volume of harvest-ready cattle standing in feedyards when the worst of the grocery inflation hit, thus retail beef sales stayed strong.

Now, as we move into shorter beef supplies, we may again get lucky. Interest rates leveling out may give consumers the breathing room to buy more steaks to grill this summer.

We definitely do not want to look through rose-colored glasses; there are still hurdles to clear. Many of us are starting to realize that operating loan interest rates are nearly double what they had been. While that may be daunting, older beef producers had experience with such challenges during the 1980s. Fortunately, one of the oth- er aforementioned records offset that challenge: record high cattle prices.

It’s crazy to think that last summer feedyards were fighting heavy carcass discounts and extra days on feed –today it’s the opposite. Presently, the hard decision they are making is to forego extra carcass pounds in favor of high selling prices now and more immediate dollars in their pockets.

Cattle feeding success is working its way down to those of us that market calves for a living. As with every market there will be swings up and down. However, it appears a new threshold has been reached. This new threshold could help alleviate the inflation troubles mentioned earlier.

Looking at the drought monitor weekly over the last two years has been a habit of mine. Watching the cherry red of the “extreme drought” area expand, most every producer, it seems, said the recent drought was one of the worst in history. These conversations included talk of having to reduce their cow herds, and there were indeed a significant number of mature beef cows liquidated across the country. In fact, so many cows were sold that earlier this year, USDA inventory counts showed the lowest beef cow population since 1961.

While this reduction was painful for many producers, there is a bright

Top Dollar Angus Team

www.topdollarangus.com

Nate Smith, General Manager (620) 546-4839 nate@topdollarangus.com

Kaytlin Hokanson • (307) 461-7687 kaytlin@topdollarangus.com

Andrea Rutledge • (406) 399-3993 andrea@topdollarangus.com

Andy Albrecht • (402) 922-1000 andy@topdollarangus.com spot ahead. The cows that remain are younger with better genetics making for a more efficient cow herd moving forward. Producers that were able to hang on have the advantage of the drought easing with an El Niño weather pattern emerging. Feed grain supplies for this fall appear to be building. We aren’t out of the woods yet, but things are looking up for the industry.

My claim is not to be a market expert or soothsayer, and a single event can always change market direction. Ups and downs will still happen. However, as a glass-half-full industry member, the outlook appears bright.

As always, I enjoy any conversation surrounding our industry, so reach out anytime! //

Register

for National Red Angus Convention today at RedAngus.org or scan this QR code with your phone.

Denver, Colorado

September 13-15, 2023

For 70 years, the National Red Angus Convention has been an opportunity for producers, breeders, affiliates and industry partners to come together from across the country and celebrate the Red Angus breed.

Wednesday, Sept. 13

Commercial Cattlemen’s Symposium

Women’s Symposium

Thursday, Sept. 14 – Friday, Sept. 15

National Red Angus Convention, Trade Show and Banquet your room at the DoubleTree by Hilton by August 10 to guarantee the special rate of $139/night. Call 303-321-3333 to make your reservation using code: RED ANGUS ASSOCIATION OF AMERICA or scan this QR code with your phone for room information.

The Red Angus Stakeholders Foundation will host its annual auction fundraiser headlined with the popular Pick-of-the-Herd donated this year by Barenthsen-Bullinger Red Angus of Powers Lake, North Dakota.

The fundraiser will take place on Thursday, Sept. 14. Support the foundation to ensure a strong future for the Red Angus breed by funding research and development as well as bolstering leadership development for juniors.

Follow us on social media for exciting updates on convention speakers, workshops and events!

Ladies’ Symposium ...........................................................................

“Carbon

Thursday, Sept. 14 (continued)

KEYNOTE: Janette Barnard – Prime Future Report on