By Charlotte Talbott Animal Agriculture Sustainability Analyst RaboResearch Food & Agribusiness, Rabobank

Investing in productivity and long-term efficiency is ideal when margins improve for cow-calf producers. The cyclical nature of the U. S. cattle industry, marked by peaks and troughs, offer strategic opportunities that can shape the next decade of production.

While low cattle supplies favor cow-calf producers, soaring prices and heightened volatility amplify the risks of a poor decision when so much is at stake( Figure 1). These production dynamics combined with elevated interest rates, weather uncertainty, geopolitical tensions and disease threats have contributed to a sluggish herd rebuild.

Although drought conditions have eased in many cattle producing regions, high prices suggest a slow and methodical expansion— one that remains vulnerable to renewed drought conditions that could stifle momentum.

Disease risk is an increasingly prominent issue. The re-emergence of threats like New World screwworm and the spread of highly pathogenic avian influence into bovine species highlight how unexpected shocks can disrupt trade, biosecurity and supply chains.

Figure 1

Figure 2

Adding to today’ s complex operating environment, sustainability remains an important, if sometimes confusing, demand from downstream segments. These pressures are driving increased pressure for transparency throughout the beef value chain. As producers prepare for the herd rebuild and beyond, transparency could influence market access, value-added pricing, and premium transfer for early adopters.

Productivity gains serve economic incentives and risk mitigation tools for producers who pursue sustainability goals during herd expansion. Supply chain collaboration and operational efficiency also cushion disease and weather risk, reinforcing the long-term, viable operations.

Navigating Risk Throughout Herd Expansion

Testing new management strategies requires time, effort and investment— change is riskier when margins are thin. As herd rebuilding begins and supplies tighten, a larger portion of the retail dollar will impact farm-gate valuations( Figure 2). RaboResearch expects strong consumer demand for beef to further support prices and increase the producer’ s share of retail value.

However, large swings in profits and losses across beef segments reinforce the need for risk management and strategic planning. Focusing on resiliency can soften the impact of

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