Cycles come, and cycles go.

Cow numbers go down.

Prices go up.

Cow numbers go up.

Prices go down.

Somewhere in the middle — while we’re coming and going — we just may hit the sweet spot where cattle inventories meet demand at a price point that allows us all to make a little money.

It should be simple to make a living in an industry that is so predictable, right? Stock up when prices are low, and sell when prices are high. As you well know, it’s a lot more complicated than that.

More at stake

There’s more at stake than not having coffee shop bragging rights for hitting the high. Think about it. What happens if everyone keeps cashing in on those heifers while feeder-calf prices are high?

No doubt, once bitten, twice shy. The lessons of 2014 and 2015 are still raw. We thought the calf market was here to stay, and we were ready for some good years in the cow business.

Well, costs went up — and a lot of them stayed. Calf prices didn’t. Now we’re back knocking at the door, but we’re still licking those wounds and very cautious we’re not going to open the door to another backdraft.

But, from an industry perspective, it’s very important we get this herd rebuild underway and start putting beef into the pipeline.

No. 1: Customers/consumers want what they want. They’ll buy from known sources, even at increasing prices, until they hit a point at which the good or service is no longer attractive. Then they’ll back off purchasing until the supply builds enough to push prices lower (sound familiar?).

No. 2: When supply continues to be low, forcing prices higher, customers/consumers look for an alternative source. More worrisome, when prices from known sources become too expensive, customers look for alternative products.

Don’t make them look elsewhere

It’s one of the reasons economists warn against withholding trade to countries as leverage to push a political agenda. The ramification of withholding access to trade is that those countries fill the void by forming trade relationships with other countries. Then, when we want to reestablish the trade, it might not be so easy. Those former trade partners may have established other trade relationships that are hard to break. We lose the demand.

The same goes with consumers. If a food staple becomes too expensive or too limited in availability, consumers may be forced to find an alternative. Once using the alternative becomes the standard, it may be hard to get them to go back to their original preference.

Our beef consumers have supported purchasing high-quality beef — even at some pretty extreme prices during shutdowns due to the COVID pandemic. But are we to the point with both supply and demand that we will force beef consumers to look for alternatives?

Good news, bad news

We’ve already seen one. During COVID, because it was unavailable in the stores, consumers rediscovered purchasing beef direct from the farm, offering a new revenue source that actually may have brought more money back to the cow-calf operator.

However, food shortages in the store also forced people to try new things. How many people tried grass-raised beef for the first time because it was the only beef on the shelf? How many people tried a nonbeef alternative?

We’ve put money into packing infrastructure. Feed costs have come down some. We’ve gotten a little rain. There are risk management tools available. We have programs in place to garner premiums for calves sired by registered Angus bulls. What are you waiting for?

Let’s get this herd rebuilding underway before we give the demand up to another supplier or a beef alternative.