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Taking the plunge into herd expansion

Progressive Cattleman Editor David Cooper Published on 01 June 2011

Each day on the way to work, I drive across a bridge. It’s an impressive structure standing 486 feet high above a scenic canyon gorge with a winding green river.

But what’s most peculiar about this bridge is how, when the season’s right, you’re bound to see people hurl themselves over it.

Don’t worry, I’m not describing a morbid scene of desperation. But rather this is the setting for BASE jumpers – parachutists who leap from bridges, antennas and earthen cliffs for the sheer rush of exhilaration.

And the Perrine Bridge is the only structure in the U.S. where it’s always permissible to pull such a crazy stunt.

BASE jumpers are a common fixture during spring and summer when the skies are sunny and the temperatures inviting.

But in late fall and winter, most BASE jumpers refuse to flirt with the idea of an off-season jump.

Even for an adrenaline junky, the winds shift too dangerously and constantly. To make such a leap is to risk one’s existence.

As odd as it sounds, there’s a connection here to the cattle industry. If you listen to those who have closely followed the impressive jump in cattle prices this year, the hottest question today is: When will it be time to expand your herd?

With prices still sitting high for fed cattle, calves and even cull cows, and with the national beef herd totals at a 50-year low, the tea leaves might indicate that now is a golden opportunity to expand.

Experts who are fully aware of producers’ challenges have said if you couldn’t make a profit in 2010, maybe you shouldn’t be in the cattle business at all.

Perhaps that’s true, but when it comes to herd expansion, the decision is very similar to a jump from the bridge.

A gutsy leap in the current market still has inherent risk with swirling winds still gusting about. For many producers, the safe season may still be months or years down the road.

Global demand has pushed beef prices to new territory. The calamities of Japan and the outbreaks in Korea are pushing exports even higher than what was seen in 2010.

Yet gas prices are hammering U.S. beef producers and American consumers. Feed prices are hovering at record levels as well.

And when you throw in other calamities – drought in Oklahoma and Texas followed by wildfires, tornadoes in the Southeast and new floods in the Midwest – the obstacles to just staying in business, much less expanding your herd, are reaching higher in 2011.

In this edition of Progressive Cattleman, you have some tools that hopefully show the trends you need to eye expansion. Inside you’ll see an insert with our 2010 U.S. beef industry statistics poster.

These posters include the most recent data from the Department of Agriculture and U.S. Meat Export Federation, related to herd inventories, exports and imports, cattle prices, feed prices and slaughter weights.

These stats have been a popular item and anticipated feature for readers of our other Progressive magazines. We’re confident you’ll find them just as handy and certainly useable throughout the coming year.

In today’s cattle industry, there may not be such a thing as certainty against risk. But what is certain is the enduring work ethic that defines the quality of beef. As long as customers keep recognizing that, the need to expand the herd is never that far away.  end_mark

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David Cooper
Editor

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