In late January, the nation was blasted across most of the Midwest and East as a storm of ice, snow, wind and rain pummeled a large portion of the country. With millions of people without power and over 70 deaths reported, the storm definitely lived up to its hype. Canceled or changed flights around the country left people stranded for days. In several videos, buildings and trees collapsed under the winter weight. It was a somber welcome to the new year.
On the contrary, much of the western U.S. is starting to feel a true unease regarding the winter snowpack. Though parts of California look to be in good shape for rainfall, the Sierra Nevada mountains have seemed to miss the abundance of snowpack. The northwest, north and intermountain regions are watching the forecast daily for elevated snow levels. As of current levels, most locations are well below 50% of normal. According to an NBC article, assistant state climatologist Peter Goble said Colorado’s snowpack is “the lowest on record for this point in the season.” Kevin Perry from the University of Utah said, “We’re in uncharted territory right now, and we’re headed toward the lowest snowpack we’ve ever had on Feb. 1.”
The Natural Resources Conservation Service’s monitoring stations across the West show most of Oregon at 30% snowpack or lower, with Washington not much better at or around 42%. There are isolated areas of high 90s, but simply put, the West is going to need a record spring or harsh late winter to offset what looks to be an extremely dry year. So, there is some shaping of a really interesting year. Factoring in the marketplace and heifer retention, the talk has been this is the year to slow down national herd decline and look for signals that the herd is building back. The producers in the West, unless things change, might not be given the opportunity to decide on their own accord. The highly anticipated biannual cattle inventory report—probably the most anticipated report to come out in recent memory—was set to be published a day after WLJ press time. The data is not available at the time of press, but by all indications and analyst expectations, the numbers should show continued decline.
Last fall’s political whiplash is now in the rear-view mirror, the holiday surge has happened and the markets are starting to settle in. And by settling in, I mean they are back to the races. Several sale barns across the country are posting new records or near-new records. Several video sales were held, and the availability of calves to fill certain windows just isn’t there. The theme for this year is going to be quality. Having the right programs on calves with the right weaning program could result in the highest premiums we’ve ever seen. And for the western producers, drought may dictate another year of not being able to retain heifers, prolonging the skewed supply and demand numbers.
Quality is going to be the name of the game. The industry is set up to reward consistent quality. The consumer has been telling us for decades that they want quality and are willing to reward us for it. Looking at the most recent holiday cycle, the typical Thanksgiving-to-Christmas surge in middle cuts and high-end products played out again, followed by a sharp cooldown after the new year. Even with shelf prices at record levels, consumers still had beef in their carts. The everchanging marketplace is responding all the time, but the consumer is continually telling us the quality will always have a market. This continued demand simply shifted after the holidays from steaks and middle meats to chucks, rounds and ground beef, which surged in demand—double digits in some cuts.
“The market is going to respond with consumer consistency as long as we keep delivering,” said Paul Dykstra of Certified Angus Beef. “Potential to test or break recent records for high-quality grades is possible late in the first quarter. However, a very limited fed cattle harvest is at the top of the ‘issues’ list during this period, so the likelihood of an overabundance of quality carcasses may very well be countered by small head counts. It promises to be an interesting season for premium beef supply.”
Industry capacity is going through a little bit of a shakeup, especially with the Tyson plant in Amarillo, TX, implementing one less shift and the Lexington, NE, plant shutting down, which roughly equates to nearly 6,000 head per day fewer in overall industry capacity. It has to be kept in mind, though, with a shortened holiday week while also being impacted by the severe snowstorms, the data is pretty skewed from the end of January. The sharp decline from Tyson’s impact, though, is somewhat offset by the addition of America’s Heartland Packing in Wright City, MO, and Sustainable Beef in North Platte, NE, which added back 2,400 head per day to the industry’s capacity. We just don’t have the cattle in the system for capacity, so watch for carcass weights to stay elevated.
2026 is already providing a story line that we need to be on high alert for. Weather patterns, reports and consumer demand are going to provide what looks like another wild ride for the first quarter of the new year. Even though we haven’t had the storms in the West this winter, it doesn’t mean that a storm isn’t on the way. — LOGAN IPSEN
