Jim Robb of the Livestock Marketing Information Center told producers at the Range Beef Cow Symposium on Nov. 29, that world population growth will be a critical factor in planning more beef production in the present and in the future. U.S. Census Bureau projections estimate 33 percent more people worldwide by 2050.

Among emerging nations, incomes are going up, Robb said, “and they’re going to demand more animal-based products.”

“We’ve got to produce more grain to produce more animal protein,” he said. “More fertilizer, more products, and we need to do it more efficiently than we ever have before.”

Comparing production on a global scale, Robb said the U.S. and its cattle production cycle has broken away from normal trends. “This is not the industry it was, and not the cyclical trend it was 10 or 15 years ago,” he said.

But for the country, now is as good a time as ever to capitalize on the lower cowherd numbers and global demand.

Canada and Australia, Robb noted, are two countries that have just now rebuilding cattle numbers following a heavy contraction period. Meanwhile, other cattle producing countries – Mexico, Argentina, Russia and Brazil – are seeing shrinking beef cattle herds, or producing cattle largely for their own people and not for export. This creates a huge opportunity for export production, Robb said.

For U.S production, this past summer’s drought was described by Robb as a “game changer” both in its impact on national cowherd numbers, and the impact on various segments of the industry.

“Twenty-five percent of the nation’s cowherd were in those areas of exceptional drought,” he said. “Many operators are not going to come back.”

But in spite of high retail prices and low supply, demand indexes for beef are still high in the U.S.  (Demand index figures consumption and the price consumers are willing to pay for beef.) Per capital U.S. beef consumption will be around 53 pounds in 2012, 20 pounds less than what it was in 1988.

“Feedlots and packers are not going to do as well next years as they did this year,” Robb continued. “A new source of volatility will have to be inserted into yearling prices.”

Cow-calf returns, on the other hand, are going to be very positive and show steady returns over cash cost, Robb predicted.

Robb said increased cow slaughter bids are drought-driven and can stop quickly, but pasture recovery as a result of the drought is more uncertain. Hay and pasture acreage was also lost in the Midwest and West due to high cash crop prices, which will apply more pressure going forward with input costs.

Producers should also expect replacement cows and bulls to cost more. And the ongoing economic uncertainty – including recent events in Europe and their impact on the U.S. economy – makes it even more critical to receive timely funds from bankers.

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Jim Robb of the Livestock Marketing Information Center said dropping global production of beef may benefit U.S. producers with their herds.