Predicting an economic market isn’t like picking the winners of bowl games. But for the sake of sound prognostics, with strong calf prices and low inputs of feed and fuel, many experts foresee 2015 to be a potential blockbuster season loaded with good returns for the cattle industry.
That outlook is even more exciting considering how good 2014 was for beef producers.
A year ago, producers were confronted with the reality that they needed to rebuild their herds. From January to October of 2014, total livestock slaughter was down 7 percent over 2013, with a small but very evident decrease in the number of cows and heifers being slaughtered. Slowly but surely, the industry has begun rebuilding its cow herd.
Weather is always a tenuous proposition, and drought still lingers over corners of the West. But for most of the country, grasslands saw critical months of recovery in 2014 as rains fell and temperatures somewhat cooled through spring and summer. Those conditions dealt producers some favorable cards as they worked to avoid selling off part of the herd.
As for the customers who actually buy U.S. beef, the picture is supposedly better – but still cautiously so. It is this momentum that the cattle industry needs to watch closely.
As of December, the unemployment rate in the U.S. dropped to 5.8 percent. The country saw 321,000 new jobs added in November – making it 10 consecutive months of net job growth.
Even more critical to the jobs is the growth in wages. The Bureau of Labor Statistics shows average weekly earnings for rank-and-file workers has jumped 2.4 percent over the year and 0.4 percent month over month.
Yes, there is still reason for caution. Analysts still wonder if that unemployment number hides those jobless over several years who are no longer reflected in unemployment data. There are also 6.9 million part-time workers unable to find full-time work. And economists also suspect higher interest rates by spring or summer.
But if people are finding jobs, earning higher pay and paying less at the pump, their spending power for food and beef is improving.
Put it together and the industry must continue to successfully cater to customers’ tastes in a period of low supply and high prices. Pork and poultry will beat beef producers to the chase in ramping up production. But customers are still loyal to beef out of experience and taste.
Recognize it now. The perfect storm of low input prices, low supply, recovering incomes and stable demand won’t last forever. But if they all take shape in 2015, it could be a year that solidifies the beef industry for years to come. 
- David Cooper
- Editor
- Progress Cattleman magazine
