Beef Industry Lessons from 2016

Posted: January 12, 2017 | Written By: Heidi Doering-Resch, M.S. - Form-A-Feed Beef Production and Nutrition Specialist

feedlot beef cattle

2016 taught us many lessons in the beef industry. You must be innovative, willing to take recommendations, act quickly, have a deep pocket, and have a shoulder to cry upon every now and again.

It seems everyone is offering their take on 2016, but one thing is for certain, a precedent $900 million expected in cattle losses to producers still hurts following the year prior at $5 billion.

The quick and dirty in my book as to how we got here:

  • We continue to import beef, although by a reduced level.
    • The American dollar is high.
    • The was an increase in beef tonnage by 5% in 2016 and it’s projected to climb another 4.4% in 2017.
      • World Ag Supply and Demand estimates beef production will reach 26 billion pounds, the highest it’s been since 2011.
      • Tyson’s dismissal of Holstein contracts, resulted in a large widening to the negative basis.
      • Cattle placements ended the year with an increase of 15% in Nov. and are expected to continue to be higher throughout 2017.
      • Retail beef has failed to follow cash trade.
      • Cash trade has failed to follow the board.
      • Uncharted negative basis levels.

Maybe not quick, but certainly could be dirty if this year continues to hand us losses like the past few years.

In order to continue to be on the right side of the banker, a few things need to be considered when looking into 2017.

  • There will be a silver lining for those managers who pay attention to detail; tight margins continue to mean detail orientation is critical to being in the black.
  • Marketing – have a plan. Period.
  • Run the projections. Form-A-Feed puts out a monthly projection report to help use as a guideline in making purchasing and selling decisions. If you are not currently getting these, you can subscribe to receive them in your email here, or find them on our website.
  • Lower the amount of heavy weight cattle marketed
    • Continue to feed for high quality cattle that will grade at the correct out weights.
    • Reduce our YG 4 and 5s.
    • Continue to take every opportunity to LEARN.

The day we quit learning or think we know it all will be the day we hang it up. Take every opportunity to continue to learn about how to be better. You can be better by:

  • Establishing your marketing plan.
  • Improving your cattle health and nutrition.
  • Creating attainable goals through performance and record reviews.
  • Time management
  • Understanding how technologies improve performance, and knowing which ones are right for your feedlot and your management skills.

Work towards implementing these tools, and learn how they will help make your performance better, your genetics better and your bottom dollar attainable.

Form-A-Feed continues to be committed to helping everyone learn. Our Professional Beef Conference will be held on February 15th and 16th in Larchwood, IA at the Grand Falls Casino. This two-day event will allow you every opportunity to see everything from how nutrition impacts your performance, to what the analysts think 2017 will have in store. If you haven’t joined us before, take this opportunity to learn and see how Form-A-Feed is helping our producers continue Together Towards Tomorrow.

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