CoBank: Beef packing capacity prepared for increasing cow herd

A recent report indicates that cow herd expansion will continue, but there should be no need for additional beef packing capacity.

CoBank’s Knowledge Exchange Division released the report saying herd expansion will rise another 3-5% in 2018 and 2019. Expansion in the past few years has been fueled by improved pasture conditions and continued profitability in beef production.

In the past three years expansion has been the most aggressive on record, says Trevor Amen, animal protein economist at CoBank.

“Recent slaughter numbers and the cattle on feed mix indicate the expansion rate is slowing, but barring any significant export market disruptions or weather events, expansion will continue through the end of the decade,” Amen says.

Despite an increasing cow herd bringing more market ready cattle through the supply chain, slaughter capacity should remain sufficient.

Export growth looks like it will continue, helping beef producers and packers remain profitable. For 2017, exports are on pace to increase 7-9%, while 2018 exports are projected to increase 5-7%.

Source: Drovers