Consolidation Continues Across The US Cow-Calf Sector
Brownfield
A market analyst says tight margins is contributing to the decline of of small cow-calf operations.
Matt McQuagge with CattleFax says the U.S. has seen a 30 percent decline of its operations over the last 3 decades. “We’ve seen a really sharp decline in the less-than-50 head operations as well as the 50 to 250 head category. The only area where we’ve seen an increase in operations is for 500-head plus operations.”
He tells Brownfield profitability may have improved recently, but, “When we think about the cost of these cattle, it becomes more of a challenge to be able to secure the amount of money necessary to start an operation or to just expand the current operation.”
McQuagge says less cattle are entering the supply chain. “A lot of that is due to increased efficiency because we don’t need the same amount of animals to produce the same amount of beef, but as we think about where we think those animals are going, it’s getting reallocated to the larger operations.”
He says the average age of the producer and urban sprawl have also been factors.