Demand is defined as when individuals or businesses in a certain area are willing to purchase a product and can afford the product at that given price point and that time. Demand is what drives any economy, any business, and any trade. This isn’t new, however, demand can be the most frustrating measure to predict because of the constantly moving price point.
I think we as beef producers are guilty of trying to outsmart the markets. But no one could have predicted the external influences that jolted our markets since the first of August. The markets have simply been too volatile—something we are becoming more and more accustomed to.
Last week created more adversities in our marketplace. The Chinese beef market is opening up, but the U.S. product doesn’t seem to be a major player. The EU, Australia, and Brazil especially, have position themselves as the leading exporters to China. Consider that Ireland alone now has approved 21 processing facilities to send beef to China. The UK has had four sites approved—the first since the 20-year post-BSE ban. Brazil is seeing growth to their cow herds as they try to provide necessary quantity to meet a growing demand they are experiencing!
As Pete Crow mentioned last week, the U.S. cattle industry is the most efficient on the planet. Once President Donald Trump and the Chinese government finalize a trade deal, our marketplace could see a major shift once again, but this time in the favor of our cow-calf sector.
Considering the obstacles we’ve faced in the last 80 days—two packing plant accidents, alternative protein sources hitting mainstream retailers, the Chinese trade war, a weather pattern that accelerated the calf run, and politics—the fact we continue to see rallies and regain lost market positions means one thing: Demand is strong for our product right now.
Consumers still demand beef raised by ranchers and are willing to pay for it at today’s price point. This is demand, and it isn’t going anywhere soon.
Since the first week of September, my schedule has been filled with auctions across the Western U.S. California is known for the bull sale run that happens in September, and you can look back at the sale reports published in these pages and feel pleased with the results.
Most bull sales this fall have averaged from $4,000-7,000, with the majority hovering around $5,000 per bull. Commercial cattle producers are extremely astute, and I credit their knowledge of genetics, phenotype, and data. They know what they need, they know what data they want to pursue, and they know what they’ll spend. I watched a strong shift to phenotype this fall, which is very gratifying to see. Overall, the fall sales I’ve been to were consistently a success.
Additionally, the best part of my profession is seeing the cattlemen and cattlewomen and reconnecting with them and their families. This really is a unique business we are in, and it’s the handshakes that make things happen.
On a final note, I want to extend a heartfelt and sincere gesture of gratitude to two cattlemen that the Northwest lost last week; Josh Dykes of Touchet, WA, and Bill Bennett of Connell, WA.
Josh and his family, wife Kristin and kids Jackson and Shelby, owned and operated 9 Mile Red Angus. They were building one of the most respected cow herds in the country and were poised to do so much more. The 9 Mile cow herd will remain intact and move forward.
Bill Bennett and wife Norma Jean owned and operated BB Cattle Co., a respected leader of horned Hereford cattle. Bill sold as many bulls in his lifetime as anyone I’ve personally known. BB Cattle genetics have been used all over the world and it will continue to operate under the Bennett family.
It’s been a pleasure to work with both men and the industry has been changed by their influence. We at the Western Livestock Journal would like to publicly thank them and their families for not just the business, but the friendships we gained by knowing them. We look forward to continuing to work with these programs. God Bless. — LOGAN IPSEN