Real-world cattle risk management

How beef trade and demand, cattle supply, and packing capacity drive cattle markets and how you can manage around them.


Sierra Day, Beef Magazine

May 05, 2022


Travis Hickey has two main points to share with cattle producers:


1.    Times are changing, and cattle markets are more dynamic than ever.

2.    Beef producers need to understand how what happens on the other side of the world affects their markets.


Hickey works with Cattlenomics, a Colorado-based market research, commodity brokerage and consulting business.


Cattle market dynamics


First, a market dynamic summary. Hickey shares global factors and trends recently influencing the cattle market:


Global beef trade and demand. African swine fever outbreaks in China created a protein deficit and drove new demand for meat imports. Plus, Australian beef production shortfalls have meant a need for more U.S. beef exports. Brazil was a major supplier of increased Asian demand until China shut out Brazilian beef imports due to BSE outbreaks. As a result, more Brazilian beef has been sent to North America.


U.S. cattle supply. Beef cow herd size continues to decline, and the dairy cow inventory also has declined, but not at the same rate as the beef cow inventory. Another change in cattle supply is the increase of beef-dairy cross cattle, which means lighter placement weights. This leads to a lower turnover rate and feedyards that stay full longer.


Mother Nature also drove an increase in U.S. beef cow slaughter numbers. In fact, nearly 300,000 more cows were harvested in 2021 compared to 2020. Thus, the U.S. beef cow supply is tighter, which also means a smaller feeder cattle supply.


Packing capacity...


Manage and measure risks ...


Risk measurement ...


Risk management plan ...