Finding Value in Risk
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market swings, prolonged drought, demand shocks and other volatility.
Key areas for investment include pasture management, genetics and techology. These are areas where ranchers are already investing resources but are also areas where productivity drives sustainability.
Throughout herd expansion, strong forage inventories buffer against drought and reduce input costs. Genetics set the foundation for cattle
Figure 3 performance, and practice incentive programs can incrementally future-proof operations.
Producers can retain a portion of ownership through later stages of production to track genetic performance in growth and carcass quality. While risky for cattle with unknown genetics, retained ownership of cattle with predictable outcomes gives access to performance data, premiums for above-average animals and greater market flexibility.
Assurance of this quality potential prior to purchasing cattle adds value and reduces risk for both feeder and processor. Marketing grids are built around carcass quality, requiring cowcalf producers to maintain some level of genetic / management data transfer, and / or ownership to realize incentives.
Leveraging Sustainability and Resilience to Create Value
Record-high cattle prices are a unique opportunity to build long-term value by growing herds with improved reproductive efficiency and genetic traits.
Enhanced genetic merit boosts sale value and ensures more predictable outcomes for future calf crops. As margins grow and incentives for high-quality beef increase( Figure 3), producers have greater access to genetic technologies that refine genetic potential for quality and consistency.
Despite challenges such as longer breeding intervals, a segmented industry structure, and limited data transfer, the U. S. has made significant strides in genetic improvement. From 1962 to 2021, U. S. beef production rose by 72 % while the national herd size declined by 6.5 %, driven by advances in genetics, feed efficiency and management productivity( Figure 3).
Emerging technologies, such as genomic selection, timed breeding protocols and embryo transfer, accelerate genetic improvement in what has been a traditionally slow process.
Widespread adoption of genomic-enhanced expected
progeny differences( GE-EPDs) in seedstock segments offers a blueprint for commercial feeder cattle and calves. Maternal traits( fertility, longevity) are more important for profitability in the cow-calf segment, but terminal traits( carcass performance, feed efficiency) can add value at sale— especially as differentiation becomes a key strategy for risk management and market growth.
The next few years will bring expanded access to practicebased incentive programs focused on sustainability and supply chain resilience. Producers seeking operational challenges will find more funding on initial investments and knowledgebuilding opportunities.
While some federal climate-smart programs have been reprioritized, USDA-NRCS programs like the Environmental Quality Incentives Program( EQIP) and Conservation Stewardship Program( CSP) remain available to ranchers. These programs support practices such as brush and invasive species management, weed treatments, prescribed burning, pasture and hay planting, prescribed grazing and genetic testing.
A recent RaboResearch survey of more than 700 farmers and ranchers found half of cow-calf and feedlot respondents are considering or interested in practice-based incentive programs, indicating interest in diversified revenue streams, provided the value proposition is clear( Figure 4).
Future-Proofing the Cow-Calf Segment
The average U. S. cattle operation runs approximately 40 head, but consolidation is increasing as production risks grow. According to the USDA, only ranches with 200 or more head
Figure 4
38 NATIONAL CATTLEMEN DIRECTIONS 2025