By Marlee Jackson

As the U.S. cattle herd hits its lowest level in 75 years, consumer demand is still trending upward, making beef a bright spot in today’s turbulent farm economy. 

“With that supply and demand, prices (per head of cattle sold) have continued to rise,” said Jason McKay, who farms at RL&M Cattle Co. in Cusseta. “We have not seen demand for high-quality beef decrease.”

McKay farms with business partners Jack Robertson and Gaines Lanier. Their RL&M, a cow-calf operation in Chambers County, mirrors farms across the country whose animals are fetching higher prices.

While consumer demand is a factor, so is an issue outside of farmers’ control. 

“It’s almost like a perfect storm,” Robertson said. “The low inventory has come mainly because of droughts out West. We don’t feel those effects as much down here.”

Drought hit heavy cattle-producing states hard a couple years ago, drastically reducing forage availability. Low cattle markets underscored farmers’ woes, which caused impacted producers to reduce their herds.

Fewer cattle led to fewer calves. That’s meant fewer animals in the harvest supply chain — and higher prices.

In January, the U.S. Department of Agriculture (USDA) reported national inventory at 86.2 million head of cattle and calves, the lowest since 1951. Last year’s calf crop came in at 32.9 million head, the smallest since 1941.

Producers have worked to alleviate supply issues by packing more pounds on cattle.

“With the number of head down, it’s important we put as much weight on them as we can before they’re harvested,” said McKay, the Chambers County Farmers Federation president. “We’ve really focused on forage quality, making sure we produce the best grass for our animals. That’s the most inexpensive way to put weight on animals. Regardless of where prices are, we want to run as efficiently as we can.”

While cattle prices have increased, so have input costs. From fertilizer and equipment to labor and energy, input spikes are tightening margins.

“We’re in it to win it, I guess you’d say,” Robertson said. “We didn’t decrease our numbers. We’re trying to stay level and not so much trying to increase either. We’re trying to maintain. We have tried to take some of the rewards, the revenues we’re getting now, and reinvest for the long term — putting extra potash on the field or buying upgraded equipment to keep us in shape or spraying pastures.”

Continued consumer demand has stretched this portion of the cattle cycle, causing farmers to continually retain fewer replacement heifers the last couple of years. USDA reports replacement heifer numbers are up marginally — increasing 1% to 4.71 million head.

“We’re not seeing the retainment of heifers like we expected,” McKay said. “We see that producers are still selling most of their calves. At some point, I think producers who are in it for the long haul will have to start retaining more heifers to maintain and rebuild their herd.”

Alabama Farmers Federation Beef Division Director Chris Prevatt reminded producers that prices will eventually contract after this extended price expansion. He urged caution, too, with the threat of rising energy and grain costs and New World Screwworm across the Southern border.

With prices reflecting the economics of supply and demand, McKay said he’s encouraged to see consumers back beef, whether at the grocery store or purchased directly from farmers. 

“We’re a little biased, but we believe beef is the best protein out there,” McKay said. “We don’t see that demand slacking off.”