It's a numbers game. The U.S. cow herd has increased by about 2.5 million head from its lowest numbers in 2014, according to Randy Blach, CEO of CattleFax. He told producers at the Nebraska State of Beef conference in North Platte recently that feeder calf supplies as of Oct. 1 were up 920,000 head over last year. The cow herd in January will be about 700,000 to 800,000 larger than the previous year, although the herd growth is now slowing, Blach said.

PLENTY OF BEEF: Big numbers in the beef industry and record total meat supply have depressed cattle markets since the days of record highs, according to Randy Blach, CattleFax CEO.

"We have a lot of cattle to move back through the system," Blach said. "We may see a short-term price recovery, but it will be limited based on the magnitude of cattle we have in the system. And there are a lot of cattle out in the yards, and they have got to move." Record total meat supply is the main reason for lower prices.

From a cattle market standpoint, Blach said, "We've all been through this before." Although prices are suppressed, the product has never been better in regards to genetics, cattle on the hoof and the quality of our beef products. "Demand has been pretty good," he said. "We forget how fast the market went up, and now it has come all the way down. The market needs to show some stability."

On the demand side, Blach suggested that it is softer, but not "falling out of bed." Much of the decline has come from the shifting in leverage, he said. "Exports are up about 7% to 8% this year, so that is positive," Blach added.

For cow-calf producers to increase profits, "we need to see the feeding industry see profits," Blach said. "We are all accustomed to volatility in the market, but it's been tough to handle." He noted that volatility experienced in late 2015 was the third most volatile market since 1990.

The rate of increasing expenses has been slowing down, but market weights have gone up, with the second-largest weights coming in 2016, he said. "The weights this year are second only to last year," he added. "If weights would moderate, it would be like taking cattle out of the system," Blach explained.

Get more information by contacting Blach at [email protected].