CALF_News_October_November_2020

41 CALF News • October | November 2020 • www.calfnews.net “The average profitability was $249 per head from 1999 to 2019, compared to $32 per head from 1980 to 1998. Is it any wonder that we lost 400,000 producers after 1980? “This is a powerful story. Demand growth drives profitability.” Rabo AgriFinance. He said the potential for new, smaller packing plants with the capacity to har- vest from 1,000 to 2,000 head daily could ease pressure during times of a cattle surplus. “These smaller packers could service calves in added-value and other feeding programs,” Aherin said. He noted, however,“an expansion of the packing industry must be driven by eco- nomics and profitability. “New plants will require an investment of about $100 million per 1,000 [head capacity]. They would need to have enough capital to survive a complete cattle cycle.” Aherin said the beef industry adapted to change after COVID-19 wrecked markets. Even though there’s hope a COVID-19 vaccine will be developed and available by early 2021, the industry must continue to change.“We were forced to accelerate change and the trend of change should continue,” he explained. “An expansion of the packing industry must be driven by economics and profitability.” – Dustin Aherin, Rabo AgriFinance Photo courtesy CAB Clyde Smith (MS) 601-540-613 Chad Holt (TX) 903-272-5010 Kyle Latham (TX) 254-715-2162 Gary West (TN) 731-335-3023 Jeff Anslinger (MO) 816-244-7340 Emily Bendish (ND) 701-471-3067 Bryan Sundsbak (SD) 605-209-0559 Molly Folot (NE) 970-218-1185 Logan Kennedy (MO) 417-592-1764 mlstubs.com info@mlstubs.com A GREAT PRODUCT ---A DEFINITE PURPOSE MLS #5 STRESS TUB ► Trace mineral, protein, and energy tub for young cattle during times of stress. ► Zinpro Availa®4 organic trace mineral package. ► Arm & Hammer Celmanax®SCP for e-coli and salmonella protection. Continued on page 42  ~ FOR SALE ~ FOR SALE agriaffiliates.com 308.534.9240 Don Walker 308.764.7175 - Mike Polk 308.539.4446 John Childears 308.539.4450 2 parcels rangeland adjoining I-80 & US 30. 4,467 Ac. & 2,819 Ac. between Lodgepole & Chappell, NE. Available separately or combined. Extensive AI Facility with feeding pens, semen collection, AI, embryo transfer. Excellent welded pipe corrals, 3,600 ft. concrete bunk. LODGEP LE RANG LAND & AI FACILITY This ranch can run 800 cow/calf pair or 1,200 yearlings for the summer, with 13 pastures, 20 windmills & tanks, 11 submersible wells & tanks, 4 portable solar panels w/pumps - fencing is in exceptional condition. Excellent set of improvements with 2009 - 1,624 sq. ft. home - 3 bd, 2 ba, full basement. 2nd home built in 1961. Main floor has 1,148 sq. ft. - 2 bd, 1 ba. Full finished basement has 3 bd, 1 ba. Excellent steel corrals and load out facility. Calving barn, horse barn, 42’ X60 ’ Quonset with concrete floor, and 42’ x60 ’ - 2010 Cleary Building w/ concrete floor. Mike Polk 308.539.4446 - Don Walker 308.764.7175 SMITH GARDEN COUNTY RANCH “Once consumers taste the good stuff, they stay with it.” – Randy Blach, CattleFax On a negative side, the cash market has suffered from grid pricing for higher quality cattle. Cash pricing is now about 21 percent, compared to 79 percent grid or forward contracting, Blach stressed, adding,“It needs to be balanced out more. “But if we go back to selling on average, do we lose account- ability or incentive to produce what consumers want [higher quality beef ]?” More Slaughter Capacity Needed Price discovery and a small cash market have been chastised even more during the COVID-19 crisis and its impact on cattle prices. Before slaughter capacity returned to near normal in early summer, an already-reduced capacity could not accept close to 200,000 head of market-ready cattle per week. “The problem with price discovery is that there is not enough harvest capacity,” Blach said. Thankfully,“the number of backed up cattle are down, but what is next?” asked Dustin Aherin, agricultural analyst with