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Factors that could slow the rebuilding of the US cattle herd

A protein analyst says herd expansion in the US cattle industry could be slow because producers are facing headwinds. 

Lance Zimmerman is with Rabobank North America. “We have more elevated, total US animal protein on the marketplace when we think about beef, pork and broiler meat. We have a lot higher interest rates and a lot higher feed costs.”

He says the demographics of cattle producers are another challenge. “Aging agricultural producers in general and what does that transition look like over the next 10 years.”

Zimmerman says the industry liquidated a record number of cows in 2022. “We also have to sit back and have a cow-calf producer that says I’m facing more volatility, I’m facing a lot higher cost of production and I’m going to need much higher prices in this rebuild going forward.  In order to fund that rebuild, we will have to pass that additional cost onto the consumer.” 

If the economy continues to slow, there could be addition pressure on disposable income from inflation and higher interest rates.