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Cattle producers watching future with “guarded optimism”

Cattle producers watching future with “guarded optimism”

Cattle numbers increase will be slow. “Guarded optimism” is best description of cattle industry outlook. Input costs continue to affect profit margins.

While there are signs of some ranchers beginning to rebuild herds, experts at the Independent Cattlemen’s Association meeting are monitoring the beef cattle situation closely as drought conditions continue to affect parts of Texas beef country.

“Some areas are still in pretty bad shape,” said Phil Sadler, association president. “Cow numbers are down due to liquidations.  Having said that, on the expense side, prudent management will be the key to being successful.”

Sadler said any upward climb in overall cow numbers in Texas will not come overnight.

“It’s going to be a slow process to rebuild herds,” he said. “The numbers are not there.”

He said “guarded optimism” best describes the outlook going forward.

Stan Bevers, Texas A&M AgriLife Extension Service economist in Vernon, told producers they need to closely monitor expenses and track performance of each cow.

“You can’t manage what you don’t measure,” he said. “The whole point of being in business is to make profit.”

Bevers said while cattle prices remain strong, input costs continue to affect profit margins. Ranchers without goals identified for their business are setting themselves up for potential problems.

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“You should make profits, then make choices,” he said.

Bevers said too many cattle producers make purchasing choices before making profit.

“When I first start working with ranches, I ask individuals if they are reaching their goals and effectively managing assets,” he said. “You need to identify what your goals are and where you are going.”

He said that starts with keeping good records. However, producers don’t have to purchase expensive software.

“It’s doesn’t have to be a $6,000 software program,” he said. “It could be something as simple as a spreadsheet or even on paper.”

Once a good record-keeping system is in place, ranchers can generate valuable data to aid in making decisions about the operation, Bevers said.

More than 300 beef producers attended sessions at this year’s meeting in Bastrop.


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