“You can see we’ve got the best profitability that we’ve seen historically any time in the past in the cow-calf industry, but there’s still a tremendous amount of variability around these numbers,” he said, noting everyone has a different cost structure, lives in different regions and experiences different pressures. “[Between] the high-cost and low-cost producers in the industry, there’s several hundred dollars [difference], and that would be the case even within a state, not just across regions. But this is sending a signal, isn’t it? A signal that we should start to retain some heifers.” 

Through the last few years, drought has been an issue across the country. Barring a deep drought that drags out for an extended period, we do have a recipe to see more aggressive expansion take place in the industry, according to Blach.

“You look at the number of cattle that we’re selling on grids and formulas, it’s increased substantially here over the last two decades,” he said, noting the industry has gone from about 30% of the cattle selling on some sort of value-based marketing agreement to about 65%. “Cash has declined. Negotiated grid cattle marketing has increased significantly. Why is this happening?” 

He explained price signals have been transmitted back to markets between value-based marketings, premiums and branded beef programs. Those factors are instrumental in changing trends, and the resulting grid premiums are substantial. 

A real shift has taken place from beef as a strictly commodity business back in the 1980s and 1990s — at that time only 50% of cattle were grading Choice or Prime. Today the upper two-thirds of animals are Choice or Prime in our production systems, Blach stated.

“This is why we’re enjoying the demand growth that we’re experiencing in our industry. We’ll produce nearly as many Prime carcasses in 2025 as we do Select carcasses. Who would’ve thought it wasn’t that many years ago our industry was producing 2% Prime, while this last year we produced 11% Prime,” he said, suggesting it wasn’t that many years ago that up to half of consumer eating experiences were no good. “When they came back and voted with their wallet, we weren’t getting their votes, were we?” 

To add perspective, Blach reiterated consumers expect high-quality beef day in and day out that is safe, nutritious and provides an enjoyable eating experience. While he says the industry has been able to deliver on that expectation for the most part, there is still room for improvement. 

Looking at where the industry sits today, a large clue lies in quality. Quality focus has been a driver for growth in our industry and will continue to be moving forward, Blach proposed before wrapping up with a statement to cow-calf producers.

“I compliment you and I congratulate you all for what you’ve been able to do,” Blach said. “You stand focused on that target: to give the consumer what they want and what they demand on a day-to-day basis.”