October 29, 2025 • 54 mins
Don Close is a senior animal protein analyst for Terrain Ag. He’s enjoying serving in leadership roles in the cattle industry and conducting research on a wide range of topics after overseeing the establishment of Terrain as the team’s first leader. Don’s prior experience includes his work as a senior animal protein analyst at Rabobank, and as a market director for the Texas Cattle Feeders Association, where he worked on all economic and market-sensitive policy issues for cattle feeders in Texas, Oklahoma and New Mexico.
In his three decades of professional experience, Don has been a licensed commodity broker, handled risk management and pricing for large cattle operations, managed a grain procurement program, and published market updates and outlooks for cattle and hogs. Don earned his BS in agricultural economics from West Texas A&M.
Terrain | The Sneaky Barrier to Herd Expansion: Big Cows
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:06):
Thanks for joining us forepisode 79 of Practically
Ranching.
I'm Matt Perrier and we arehere.
Thanks to Dalebanks Angus, yourhome for practical profitable
genetics since 1904.
Once again, I'm late with thisepisode.
No excuses, no apologies.
You know, I'm not sure you cancall a side hustle, a side
(00:27):
hustle when it's also a pro bonogig, but that's what this
podcast is and the last month orso, I haven't been able or
willing to prioritize it overthe real hustle, the ranch, the
family, and everything elsegoing on in the last few weeks.
But we are back with a reallygood discussion with Beef
(00:49):
Economist Don Close withterrain.
The past week's marketcorrection following our
president's comments about beefprices have spurred quite a few
discussions, quite a fewmeetings and infinite social
media posts.
You know, I've read and listenedto a few of these, uh, very few,
(01:11):
and I've had mixed emotionsafter I get done with each one.
You know, it brought to mindthat we started this podcast
three and a half years ago forthis type of reason.
Issues like these are usuallymore nuanced and more
complicated than an Instagramreel or a truth Social post can
(01:35):
cover.
Honestly, this one's way morenuanced than an hour podcast can
cover, but Don and I are gonnatouch on a few of the high
points as we see them.
We talk a little bit about thelast week and a half's events.
We talk about beef prices andconsumer demand.
We talk about expansion signalsand, and his article from last
(01:57):
spring, the sneaky barrier toherd expansion, big cows.
Most of all, we talk aboutperspective and confidence in
the marketplace and how the lastcouple of weeks, as tough as
they have seemed to be.
They may, may very well lengthenthis stage of the cattle cycle
(02:19):
where cow calf producers havebeen in the driver's seat and
may very well continue to be inthat driver's seat due to supply
fundamentals and the lack ofherd expansion.
You know, Don, Don and I, and Imentioned this, Don and I tried
to record a podcast late lastspring, and we had so many
technical glitches that wefinally gave up and decided it
(02:41):
may not have been meant to be,this one went better, but I
guess an episode with Donwouldn't be complete if I didn't
have some kind of technicalhiccup.
So about two thirds of the waythrough this episode, my
microphone quit working.
I didn't know it.
Uh, luckily the echo throughDon's speaker quietly captured
(03:02):
most of my portion and the goodpart, Don's, is fine, but I get
pretty faint and pretty quiet inthe last third of our
conversation.
To my friends listening, whatcan I say except,"you're
welcome." As always, Iappreciate you listening.
I appreciate your continuedsupport of this podcast and of
(03:24):
our Dalebanks Angus program.
Uh, if you would stick around atthe end for a brief bit of info
about our Bull and heifer salecoming up on Saturday, November
22nd.
Most importantly, I appreciateyour interest in the beef
community.
You know, US cattlemen are apassionate bunch, and we're
really passionate about thisbusiness, and I'm glad that so
(03:46):
many of you are willing tochannel this passion toward
progress; regardless of thenoise that might be happening
around us.
So keep up the good work andenjoy this conversation with Mr.
Don Close.
matt_2_10-27-2025_100619 (04:00):
Don, we had scheduled and tried,
what, two or three times to do apodcast this summer?
and
don_2_10-27-2025_100617 (04:07):
Yep.
matt_2_10-27-2025_100619 (04:08):
don't even remember what we were
talking about.
You'd written something and Ithought it was brilliant and I
thought, we've gotta get out,get.
On here and talk about it.
And it was a whole lot morepositive than any of the
discussions that anybody in thisbusiness has had over the last
week.
or two.
don_2_10-27-2025_100617 (04:25):
It's, uh, for the market information
business, it's been a toughweekend.
matt_2_10-27-2025_100619 (04:31):
So how in times like this and we have
to qualify this, we arerecording at 10 0 7 Central time
on Monday.
The 27th of October, because Idon't know for sure whether I'll
get this out this week or next.
And honestly, we'll probablytalk for an hour and something
(04:51):
could change significantlybefore we're done with this dang
thing.
How does a
don_2_10-27-2025_100617 (04:56):
it, and likely will.
How does a
matt_2_10-27-2025_100619 (04:57):
in times like this, sort through
the noise and what do you lookat as you have customers and
clients and producers turning toyou for answers?
don_2_10-27-2025_100617 (05:07):
I'm gonna give two answers.
The first and probably the mostprofessional answer is you've
just got to do everythingpossible to close out all of the
noise and what were thefundamentals that we were
working with a week ago, andlook at it from that
(05:27):
perspective.
The second answer again, is notnearly as professional, but I
tell clients.
There are just times that thebest thing you can do is shut
that screen off and go dosomething else.
You just got to step away longenough for hopefully the smoke
(05:50):
will clear, but just to get aclear head that you just don't
get so caught up in all thenoise.
matt_2_10-27-2025_100619 (05:57):
I was fortunate last week as the
president made his comments andas everything leading up to that
and following it occurred, wewere ultrasounding bulls and
collecting yearling data andgetting a catalog off to press,
and getting ready to clip bullsthis week, which we're doing and
(06:17):
videoing and everything else.
I've got a bull sale to getready for, and I think that was
maybe God's way of saying,"youneed to keep your nose to the
grindstone because otherwiseyou'll go down these rabbit
holes.
And really get worked up." So Iguess either fortunately or
unfortunately.
I didn't get to probably stay asclose to the goings on and the
(06:38):
markets and everything else,and, and the things that were
driving the markets.
Anybody with a heartbeatprobably knows.
But let's from your standpoint,let's recap some of the things
that have led up to what we'veseen in the last, okay.
This is Monday, the last sevento 10 days of this market.
don_2_10-27-2025_100617 (06:57):
Okay.
So we started off with I believeit was a week ago Sunday night
that on Air Force one, trumpmade a comment to reporters that
beef was too high and that he,they were gonna fix that, and
(07:20):
that the answer to that problemwas to bring in more Argentine
product.
And then they came with the, the13 page three to five point plan
from Secretary Rollins of stepsUSDA was going to take to
(07:40):
rebuild cattle, US cattlepopulation.
there, there were positivethings in there.
Are there, is there anything inthere that is a real game
changer?
No.
And then there was a text or atweet or whatever, that a, he
(08:04):
was going to increase the thetariff rate quota on Argentina.
And with that, perceptions werethat, we were going to probably
see a 50% increase or, evendouble it.
And for 24 and year to dateArgentine product was about 2%
(08:30):
of our total imports.
It was a no no, star.
We didn't expect that TRQ to gofrom uh, 20,000 metric tons to
80,000 metric tons, which was abit of a shock to the market.
So then there was some pushbackon that.
And then that's when Trump camewith the tweet that producers
(08:51):
should be thankful for him.
That industry has been doingnothing for the last.
10 to 20 years and that it washis tariff implementation that
enabled them to enjoy the pricesthey've seen for the year.
And that's when the train wentoff the rails and social media
(09:13):
exploded with the reactions fromproducers and, uh.
from that time, things we gotthrough the end of last week.
The market was down hard lastlimit last Friday, and
everything's okay, let's just,let's take the weekend and take
a breather.
And then we got uh, yesterdaymorning with all of the uh,
(09:36):
Sunday morning talking heads anduh, secretary Bessent's talking
that all the trade agreementswith taiwan, Vietnam all of
that.
And that essentially anagreement was in place with
China and that Trump and Xiwould be meeting this Thursday
(09:56):
to make finalizations.
And then there's, there'sthere's talk in the market that
president Lula from Brazil isrequesting a meeting uh, with
Trump.
This week and that that couldlead to a reduction in the 50%
tariff rate with Brazil.
(10:17):
And then the final thing uh,that immediately comes to mind
is that the me, Mexico I believeSecretary of Agriculture or
equivalent is coming toWashington this week to make a
request to open the border toMexican feeder cattle.
So the.
The massive uncertainty in themarket, whether we, you know we
(10:41):
closed last week thinking we didnot have anything going with
China.
Now we're led to think we do,but the two real the straws that
broke the camel's back as far asthe futures market goes, is the
potential to see the 50% tariffon Brazilian product be reduced
to a more functionable level.
(11:03):
And then the real one is whathappens once that uh, border's
open to Mexican feeder cattle.
matt_2_10-27-2025_100619 (11:10):
So there's a lot there.
I wanna
don_2_10-27-2025_100617 (11:12):
Yes.
matt_2_10-27-2025_100619 (11:13):
the first one and I guess I'm gonna,
i'm gonna show my true colorsand my opinion, and I made a
post for those who follow me or.
Our Dale Bank's, Facebook,Instagram accounts.
I made a post about this Friday.
The thing that is mostfrustrating to me about this
whole thing, president Trump'scomments, the ensuing debates
(11:36):
and, mudslinging on social mediaand meetings and everything else
across the nation.
The thing that I think gets lostis the quality portion of the
beef price today.
and that to me is reallyunfortunate because as we go to
comparing what beef is pricedtoday, especially compared to 20
(11:59):
and 30 years ago, like thepresident has claimed If I had
the opportunity to sit down withPresident Trump, which I won't,
but the first thing I would sayis, Mr.
every business dealing, everypersonal dealing, every dealing
that I've seen you do over thelast decades Has had one thing
(12:20):
in common, and that is you likequality.
Golf courses, real estatehotels, nobody.
And certainly you wouldn'texpect to go in and renovate a
hotel, reopen it, which he'sdone.
And turn it into the highestquality experience that anybody
could take part in, and thencharge the same room rate that
(12:44):
it was when it was the CommodoreHotel in 1970, whatever, when he
bought that before he turned itinto the Grand Hyatt in New York
City.
We have done that with beef.
If you look at what we wereselling in 19 96, 30 years ago.
You can't even compare it towhat we're selling today.
And so guess what?
(13:04):
That price should be higher andconsumers have rewarded us for
doing that.
You talked, you and I talkedabout this the last time we
visited a couple years ago, thatconsumers like quality.
And they are willing to pay forit.
Why in the world would anybodythat has had the success
marketing quality that DonaldTrump has, try to compare that,
(13:27):
make that comparison.
And so that's the thing that Iwould like us to be talking
about as an industry.
Not, these posts that say well,our costs are higher, so we
should get paid more.
Well, That's not how the marketworks.
The market tells us what we'regonna get based off of what the
consumer is willing to pay.
And my question to you as aneconomist, when you look at the
data, is beef too high?
don_2_10-27-2025_100617 (13:50):
I do not believe beef is too high.
Hard Stop.
And why I say that, there's beena flurry of charts throughout
the marketplace over the lasthandful of weeks, but.
We've all been talking about thenumber of minutes
matt_2_10-27-2025_100619 (14:09):
Yeah.
don_2_10-27-2025_100617 (14:09):
work to, to afford a pound of beef
and those, depending on whetherwe're talking ground beef prices
or if we're talking all freshbeef price, choice beef, there,
there's small differences indetails, but the bottom line is
for this 30 year period thatyou're talking about.
(14:30):
As wages and affordability hasincreased, beef prices have
essentially gone up at exactlythe same rate as that average
hourly wage.
So the minutes required to workhasn't varied.
Four minutes in the last fourfour minutes to and varying
(14:52):
between 11 and 15 depending onwhat data series we're looking
at.
But we're talking the averagehourly wage is working 11 to 14
minutes to buy a pound of beef,and that has been true
throughout this 30 year windowthat you're talking about.
So if, if I'm thinking theaverage guy's gonna work 14
(15:16):
minutes to afford a pound ofbeef, is that going to be a deal
breaker on whether he buys ordoesn't buy?
No.
matt_2_10-27-2025_100619 (15:27):
So is there something else, in your
opinion, and now we're probablygetting a little more on the pol
political side of things and notthe economic side, but is there
something else at play here thatwe're missing?
We're, know, seeing the abilityor President Trump seeing the
ability For beef to be a hugenegotiation I hate to use the
(15:50):
word pond, but uh, somethingthat he can use in his favor to
get something else clear outsideof the beef industry from
Argentina, Brazil, wherever thecase may be.
don_2_10-27-2025_100617 (16:05):
I think there are a couple of things and
one of those two was answeredover the weekend.
I think when he makes thecomment that he likes melee and
he would, he wanted to see himreelected to have.
One spot of democracy in centraland South America.
I believe that's a truestatement.
I also think if you look at thedeals that he's making in
(16:30):
regards to the trade agreementwith Australia, a part of the
trade agreements in SoutheastAsia, I think a real key driver
in this whole, the backstory inthis whole thing.
Has been, he's scrambling to getaccess to those rare earth
elements that have try to that'sthe ingredient that makes this
(16:54):
whole artificial intelligencething run.
And I think that he's lookingforward to come up with enough
alternative supply that whenChina says, we're no longer
going to offer those rare earthelements.
To other countries.
He has a solution and a pushbackto China.
(17:15):
I think that's a huge driver inthis whole story.
matt_2_10-27-2025_100619 (17:18):
Have we as a as a, beef industry, in
your time as an economist, havewe ever been used as that ace in
the hole by a president that canget something else because, or
thanks to the product that we'reproducing?
don_2_10-27-2025_100617 (17:35):
Oh, we could probably do twist on that
and have we been used to that inthat manner?
It certainly doesn't come tomind but I think back to my
limited memory of the Nixon'sprice freeze and how much we as
industry thought that cattle andbeef prices would soar once that
(17:58):
price freeze was lifted andfound just the opposite.
The other example that I wouldgive specifically to the beef
side that we were used as a pawnis the whole herd, dairy buyout
and the quantity of beef thatdumped on the market.
The beef cattle sector wasclearly used as a pawn and
dumped on in that occurrence,
matt_2_10-27-2025_100619 (18:19):
supply side moves.
And that's the thing that.
On one hand, I guess I puff mychest out and go, wow, look what
we did.
We are now something to be soproud of that we can get
something else from our tradingpartners.
I don't like it, but I've neverseen in my life, I've never seen
(18:42):
beef in such demand that we getto quote unquote, be used to get
something else that societyneeds in the United States of
America.
And so I guess kudos to us.
Great work, although it reallysucks in the short term.
And that's something that Ithink that um, we are so
ingrained as ranchers, as feedyards, as everybody in this
(19:04):
industry at looking things froma supply side.
Why is beef high?
Oh it's because we don't havemany cows.
Oh wait, we're producing just asmany pounds as we have.
We haven't hit the tightsupplies by keeping a bunch of
heifers yet.
And so all of this being drivenby demand it's really
interesting to me because yeah,those are the two things that I
(19:24):
go to as well.
The dairy buyout, the pricefreeze in the seventies and
eighties that led to some majorturmoil in the beef industry.
But those were supply sideinitiatives.
This one's demand, this is'causepeople want our product and want
access to our market.
It's a different animal.
don_2_10-27-2025_100617 (19:43):
Earlier on we were talking about, okay
what has been the chain ofevents over the last week?
And I think, if you look at the,at the cattle community as a
whole agriculture really butspecifically the cattle industry
have been as big a Trumpsupporters as have as has been
(20:05):
out there, no doubt.
And.
The whole mantra from when hefirst went down the escalator
was to make America great again,but to then turn around and to
his loyalist supporters and say,we're gonna make America great
again.
in everything except beef, wecan bring in Argentine beef.
(20:27):
I think that's where the realsense of betrayal came from in
this, this last week activities.
matt_2_10-27-2025_100619 (20:34):
no doubt.
And I think that's the onething.
I mean, He has united allsegments, all producer groups,
almost all, because they,everybody feels the same way.
I mean, It was a slap in theface.
And I think the principle of itis the most frustrating.
Again, I look at it from asupply and demand, especially
demand reward for quality, allthese different things.
(20:57):
None of it makes sense.
from what we have heard from thepresident.
And that's why I say that.
And I've seen the post somepeople saying that, president
Trump, like his character ornot, he always has a strategic
plan in order and there's awhole lot of noise that
surrounds that.
Sometimes I think that takespeople's eyes off the ball.
(21:20):
So that he can get done what hewants to get done but there is
something at work here that hehas a plan, hopefully.
For the better of all of us.
But yeah, it is doggonedifficult to reason the
comments, the moves obviouslythe fallout on the futures board
and things like that as we go.
(21:41):
So whether we're talking aboutArgentine beef, when we throw
the Brazilian piece in there,that changes it significantly, I
would say, in terms of volume,because again, Everybody's
already probably seen just howlittle volume Argentina could
probably send us if theycontinue to consume at the rate
(22:01):
that Argent have always consumedmeat and beef.
F let's just go with what weknow.
Or if it's just Argentine beef,does that really affect the
market?
From a supply of beef at all?
don_2_10-27-2025_100617 (22:15):
No.
When I went through and I lookedat at the various tariff rates
and the escalation, if you addin there, the fact that whether
they're enforcing it or not isunknown, but Argentina has a
6.75% export tax on product.
(22:38):
If you add our.
T escalated tariff rates plusthe 6.75% export tax from
Argentina.
I can actually make a mark anargument that product delivered
to the east coast it, most ofthat product goes into
(22:58):
Philadelphia, but for east coastdelivery, it would actually be
higher than where our domesticnineties are trading today.
N no, it's a, it's, it is a washat best.
I'm not really sure exactly themath that was used, I've seen
one breakdown that, that showsmaximum it could increase ground
(23:21):
beef prices by 6 cents.
I, I, I'm not even there.
I say it significant.
No, it's, it is not a, that'snot a game changer.
matt_2_10-27-2025_100619 (23:31):
Let's throw Brazil out there and if
that is part of the deal andthey get reduced tariffs and it
is able to come this way, thenwhat, what is your calculus on
that?
don_2_10-27-2025_100617 (23:46):
The most honest answer I can give
Matt is, I don't know, is it bigenough to be a game changer?
Undoubtedly, yes.
But to take that that tariffrate from.
Like 74%, 74.6% down to anunknown level, we don't know.
(24:07):
So we're at this juncture, wesimply don't have the
information available to evenmake an estimate on what that
amounts to on just availablequantity, could we be talking.
10,$20 maybe.
matt_2_10-27-2025_100619 (24:28):
And the beef that would come from
Argentina and brazil, correct meif I'm wrong, would be almost
solely 90% lean trim correct?
For grinding beef.
May I ask you a philosophicalquestion going forth, should
choice beef choice.
High choice in prime, I wouldsay.
(24:49):
Should that be separated from aretail, from a consumer, I
should say standpoint from grindfrom hamburger?
Are those two differentproducts?
In other words, people willtrade down from hamburger to
chicken breast, but they may nottrade down from a strip steak to
chicken breast, and if so, howdoes that change how beef market
(25:11):
prices live?
Cattle fed cattle.
Feeders et cetera, et cetera.
How does that change with theseimports and thoughts about that?
Because they're probably notgonna be competing with that
part.
of it.
don_2_10-27-2025_100617 (25:23):
Youve just asked an incredibly
difficult question to answer.
My, my answer to you is andessentially, correct me if I'm
wrong, but what I think you justdescribed was mCOOL..
Huh.
(25:43):
And do I think that productshould be segregated?
No, I don't and I give thatanswer because of, we saw from
when Cool was implemented thatconsumers may say they want that
(26:05):
differentiation or label.
But at the end of the day, priceis what drives that purchase,
and they said they didn't care.
The other side of that is thecomplexity of that whole ground
beef complex and the quantity ofthat product that is actual
(26:28):
grind and trimmings from the fedbeef sector.
The just roundhouse term of 55%of that product that comes from
our domestic non-ED slaughter,and then the balance of that
product that comes from importsand exports, or I'm sorry, from
imports to be able to reallydistinguish those products and
(26:52):
the added cost that's requiredto have those products labeled.
I, I just I don't think thejuice is worth the squeeze.
matt_2_10-27-2025_100619 (27:02):
Your your, white paper that first
introduced me to you, howevermany decades back Ground Beef
Nation might deserve dusting offand a reread.
If I thought that was where youwere going after I had asked my
question.
cause I wasn't trying to leadinto an MCO l discussion, but,
don_2_10-27-2025_100617 (27:22):
lead into no but you trust me.
You are not the only one thathas has reached out or made
comments that there was moregoing on there than what we
thought.
Hopefully.
matt_2_10-27-2025_100619 (27:35):
it's to me, as we talk to folks
about.
Quote unquote, beef beefconsumption,we have to recognize
that while we are all very proudof the huge gains that we've
made in the quality and theconsistency of whole muscle
cuts, and the demand that we'vebuilt because of it and the
(27:57):
profitability that it isintroduced into the beef chain
because of it.
Are we still at 60% beefconsumption is grind, is
hamburgers?
don_2_10-27-2025_100617 (28:10):
I, in my opinion, yes, we are, and I
actually had that conversationwith a retailer over the weekend
and was trying to get an answerout of them of what percentage
of their sales were groundproduct.
Industry-wide, we talk, I thinkevery, the most common response
(28:32):
to that question is 50, 55%.
If we really take a breakdownof, of how that product's used
and the peg board add the pegboard items in there.
In my personal view, it's closerto 60, but that's, we're talking
5% difference here.
matt_2_10-27-2025_100619 (28:48):
or
don_2_10-27-2025_100617 (28:48):
And That's volume?
Now.
One thing too that we need toincorporate into this part of
the conversation is a hugedriver in what has enabled fed
cattle prices to get to thelevel we've seen this year is
(29:09):
because of this shortage ofgrinding material that we're
talking about industry has hadto grind an escalated volume of
chucks and rounds that havepulled those muscle cuts off
the, off of the market limitingthat supply.
(29:30):
So the contribution made fromChuck and round items to overall
cutout, that's been a, a hugedriver in this whole equation.
matt_2_10-27-2025_100619 (29:40):
Well, It has, it has made for some
interesting demand and supplydiscussions.
And I think anytime we havesomething like this that causes
us to ask those questions and toargue and debate, whether it be
online or face-to-face or phoneconversations or whatever, I
think it's good.
I don't like the catalyst andthe way we got here, but I
think, it's it's beenfascinating to me just how many
(30:04):
ag economists and beef supplyexperts have come outta the
woodwork in the last 10 days.
I, I mean, Some posts from
don_2_10-27-2025_100617 (30:13):
I mean most from
matt_2_10-27-2025_100619 (30:15):
even in the cattle business that have
all the answers.
And I'm like.
don_2_10-27-2025_100617 (30:21):
And I'm like,
matt_2_10-27-2025_100619 (30:22):
if it wasn't
don_2_10-27-2025_100617 (30:23):
this is wasn't
matt_2_10-27-2025_100619 (30:25):
to some people's bottom line that
are trading on these futureboards this week, or selling
calves even.
This is.
Great entertainment.
It's very comical to watch allthese experts come outta the
woodwork.
don_2_10-27-2025_100617 (30:38):
Tell you what when some of these uh,
huge developments occur in thisrapid of succession I'm about
ready for, have some of thoseexperts come out, they can have
it.
I, this let me off.
matt_2_10-27-2025_100619 (30:52):
Yeah, as a, as an Ag
don_2_10-27-2025_100617 (30:54):
Yeah.
matt_2_10-27-2025_100619 (30:55):
person told me last week when I texted
a question to them, they justsaid.
Can I get off this ride?
It's it's maybe gotten tospinning a little too fast.
So when I called you lastspring, and I had to dig this
email back up.
This was in April that I hadread a, an article that you had
(31:18):
published in CB's newsletterthat was titled The Sneaky
Barrier to Herd Expansion.
And that's what I wanted to talkabout then.
don_2_10-27-2025_100617 (31:30):
then.
Yep.
matt_2_10-27-2025_100619 (31:30):
Has your, first of all, let's talk
about what that sneaky barrieris and was, or the barriers.
And then I guess with the weektwo weeks events and turns, do
you still see that?
And where do you see expansiongoing from here?
Given all of the things that weknow on October the 27th at
(31:52):
10:37 AM.
don_2_10-27-2025_100617 (31:55):
There, there's several questions folded
up into that from when Ipublished that article last
spring, early summer.
My, my view on that topic hasonly solidified, I think that
the abil, the number of headthat we can graze per unit has
(32:17):
been, cut back and limited justbecause of the added consumption
of the additional, let's justsay, two to 300 pounds on the
average cow.
matt_2_10-27-2025_100619 (32:28):
Yeah, just make, sure in case people
didn't read that sneaky barrieris that it takes more land to
run a cow today, and that's whywe haven't expanded more
don_2_10-27-2025_100617 (32:39):
It, it, we can say it takes more land
or.
And as I think about it, becausemost producers have a fixed
number of accessible acres, Ilook at the reverse of the
equation and we just can't runas many cows on the fixed unit
as what we did
matt_2_10-27-2025_100619 (32:57):
Okay.
don_2_10-27-2025_100617 (32:58):
1975.
matt_2_10-27-2025_100619 (32:59):
And so, as you have solidified that
opinion where do we go?
From here.
Do we see a change, major changein management and delivering the
nutrients to those cows?
Do we see a change in size andmetabolic needs of those cows?
Where's the economist's seat?
Say we're going from here.
don_2_10-27-2025_100617 (33:22):
I don't know that, that we've been on So
running so hard on that, on thattrend that, that, I don't know.
It, It is like all these otherthings that this isn't a quick
fix.
Now we don't have, we haven'thad any data now going on, you
know, because of the governmentshutdown.
But we've made the commentthroughout this conversation
(33:42):
that beef production isessentially unchanged with the
reduced number of cattle becauseof increased carcass weights.
We're down a couple of percentit we could be down as by years
end, we could be down as much as4% on beef production for the
year.
So it, we've done an amazing jobof keeping production steady but
(34:06):
the weight of that, ofcontinuing making cattle bigger
and having a quicker rolloverit's starting to weigh on us,
we're struggling harder to keepthat beef production level un
changed so that, that's, thatneeds to be brought out.
As we go, you know, and I, Ithink about it and I'm going
down an area that you are, youare way, way more professional
(34:29):
in than I am.
But for so many years when a guyhas gone and looked through his
calf crop to select thoseheifers, he's going to retain.
He picks the biggest, fastestgrowing heifers in the pen.
(34:49):
And so we've just, we forcedthis increase in, in cow weight
by genetic selection.
I think that's been a driver.
The other challenge I see withthat is if we were to go, if, if
we were to go back and talk.
To try to sell a customer a penof bred heifers, and we're
(35:14):
trying to sell him somethingthat's going to have a mature
body weight, cow weight of,let's just say 10 50 to 1150.
They couldn't drive off theplace fast enough.
matt_2_10-27-2025_100619 (35:28):
Yep.
Been there.
don_2_10-27-2025_100617 (35:30):
There we've created a lot of
challenges in this whole thing.
I, you know, I, I read articlesand I talk about, and the
articles talk about.
The number of cows that can becarried on a unit and the number
of saleable pounds of productfrom a set of moderate weight
(35:51):
cows to the number of pounds ofsaleable product from a large
set of cows.
And there's actually more, moresaleable pounds from the herd of
smaller cows with more numbersthan there is the bigger cows.
I believe that's true.
I really believe that's true.
matt_2_10-27-2025_100619 (36:10):
how much, we go back to last week's
announcement by the Departmentof Ag and trying to open up some
western lands, public lands,some CRP.
How much does that help?
and that's a very regional, andagain, I told somebody the other
day that called, was all up inarms about this, and I said, you
know, it's been a long timesince we've had a east versus
(36:30):
west battle in cattleassociations and policy
discussions.
But this may cause that becausethis is gonna pick some winners
and losers in the ability toexpand if you have access to
those acres as compared tosomebody in my area where we
don't have either CRP or publicgrazing lands, that our guys
(36:51):
will go, eh, I don't get theopportunity to take on more just
right here next to.
Me.
don_2_10-27-2025_100617 (36:59):
You are way more optimistic from the
impact of that announcement thanI am to, can we open up some
acres?
Can we make life better morefunctionable for that Western
producer with the policies thatwere in that 13 page document?
Yeah, I believe so.
(37:20):
Is there gonna be enough groundopen up to radically change cow
numbers?
I'm just not there.
Okay.
Yeah, and you may be right.
I just, that's one of those thatfrom the outside looks like it
could be, but maybe it may notbe.
I, and I'm talking above myknowledge level here, but I
(37:43):
just.
While there clearly areexamples, that increased grazing
could be helpful.
But I just think if you takefence quality, if you take just
how fractured a lot of thatground is the functionality or
usability of a lot of thatpublic lands, I still think is
going to be a challenge.
(38:04):
Yeah.
So let's change gears for just aminute.
We're gonna go back a little bitas we talk about importing,
lean, trim, and grind.
Do we today, and I really do notknow the answer to this.
Do we have an excess of beeftallow as we increase these
(38:25):
carcass weights and have allthis additional fat on these
heavier carcasses?
Are we using all that in grindor for something else that we're
refining?
And if not, does that increasethe value of beef Tallow enough
that we make a little more offthe carcass because outta a
demand for the white fat.
(38:45):
I first to answer the question,we have a massive excess of fat.
Okay.
I figured we did ma massive.
I have heard, I've heard thecomment has been made to me by
some incredibly credibleindustry leading meat science
(39:07):
folks that when we take a 1600to 1700 pound steer, one third
of his live weight is fat.
That's including internal?
Yes.
Yeah, so that's a per that'stotal pounds of fat against his
live body.
(39:27):
Weight is fat.
So we got plenty to go around.
Yes, just.
Whether it's that much morevaluable as grinding fat to go
in with those nineties to make aso 80 20, 70 30, whatever the
case may be.
We're, we were getting to thepoint of minutiae, but back when
(39:47):
we were having that whole groundbeef conversation and blending
rates, one thing that we did notsay in that is if we do.
See increased product fromArgentina, whatever that
quantity's gonna be.
If we do see a more livabletariff rate from Brazil and that
(40:11):
product starts coming back in,so we get that supply of
nineties, it's going to be pricesupportive to 50% lean.
Now, is that a sva?
Is that gonna save the farm?
No.
But to keep, when you lower theprice of nineties, you're going
to increase the price offifties.
(40:31):
Fifties, okay.
One, one other thing that I do,I really think there is merit
to, I think, the wholeregenerative renewable diesel
thing.
I just I don't get it.
But I do think the re the publicdebate on food safety with seed
(40:54):
oils and the number of peopleand restaurants starting to go
back and use beef tallow as afrying oil, I think we could see
see measurable improvement.
And it's not gonna be a gamechanger, but I think we could
see measurable improvement tocut out.
(41:15):
By during, by bringing thosedrop credits up.
When Secretary Kennedy, it wasbefore he was Secretary Kennedy,
I think it was on the campaign,started talking about that and
Steak and Shake or whicheverYep.
Smaller burger chain announcedthat they were gonna switch to
beef towel for their, for thefryers.
Friars.
I had a fellow cattleman say.
(41:37):
This could be absolutely hugefor cattlemen, and I haven't
heard anybody since thenpublicly say that, Hey, we could
see a major profit driver be onthe fat, the 50 even the
straight fat.
Yep.
Yeah, I, I haven't heard anybodyelse talk about that, but I'm
glad that you brought it up andI don't know to say that it's
gonna be a, a game change.
(42:01):
It's not gonna be.
A mega price impact, but it willit be an escalating contributor?
I do believe that's correct.
Every little bit helps,especially when we get to
talking about drop credits andthings like that because that
goes a long ways to even justpaying for the processing Yes.
Of these things.
That brings up another questionand you may or may not track
(42:25):
this, I know AX does, andseveral do.
Do you on a monthly basis orannual basis track where we see
estimated profitabilities at allthe different segments in the
beef chain from retail typeprocessor feed yard on down.
I'm absolutely interested everyyear to see the cattle facts
(42:45):
result.
I don't run that calculationpersonally.
Okay.
But I do.
But I do value them doing it.
It's been comical to me the lastweek of seeing some of these
posts as some of our cow calfproducers that will cast blame.
And we're not the ones thatshould be losing all this
(43:06):
profitability when the packer ismaking what they're making right
now.
And I just stand there.
Slack job going, I wouldn't wantto know.
What packing processing segmentsare losing today given the high
price of fed cattle andeverything else.
And so I didn't know if you hadaccess to that, but I would say
(43:27):
it's negative.
It's just a question of hownegative it is right now.
Correct.
Let's just call it 200 to$250today.
And it, and earlier in thesummer it was on top of 300.
Yeah.
Yep.
That's and they made a lot ofI'm not making excuses.
Because they made a lot of moneyfour years ago.
Yes.
And I get that.
Hopefully they've still beenable to use some of those
(43:50):
coffers to get through the lientimes.
But yeah, this would be a timethat I would not want to own a
large, any size of packingprocessing plant.
I have you have an idea, but youknow, the, the overwhelming
majority of my customer contactis with individual producers and
primarily cattle feeders.
(44:12):
But over the last year, I havehad more interaction with beef
packers.
That are looking for aperspective of market
contraction, where we're at withexpansion and just as they're
trying to work on this wholemargin thing they, the, it is a
(44:33):
huge hurdle.
And you said it, what we, whatwe're seeing, they all made
tremendous amounts of moneythrough COVID and Okay, fine.
But what we've seen, they,they've all spent some money on
CapEx, but they've dividedthemselves into those that set
on the money waiting for thisday to happen.
(44:55):
And those plants that have spentlarger quantities on capital
expenditures and trying toincrease efficiency to get their
self through this tight supply.
So essentially we've got twobattles going on today.
We've got those that betweensetting on the money and capital
expenditures, and then we havethe battle of the old existing
(45:18):
plants that's setting ontremendous cash resources
against the new startup plants.
So there's a couple of differentbattles going on there, and
quite often in that segment,those folks are constantly
looking long term.
Yep.
They're looking.
Five years, 10 years down theroad and saying, where are we
gonna be?
(45:38):
Yes.
And I, and quite often myneighbors are looking five years
behind and comparing to where wewere and what we were doing and
it's frustrating to me that wehave that habit.
It.
As running cows, but I thinkit's probably because we've used
Mother Nature and we've usedtrends and things like that to
(46:02):
teach us, and quite often thatmakes it harder to look long
term.
This discussion we're lookingat, as I speak on the futures
board,$2 and 27 cents livecattle and$3 and 46 cents feeder
cattle.
And considering that a trainwreck.
(46:23):
Yep.
Sure.
When we, if we just looked backsix months or a year.
Yep.
When we thought times were, Imean I remember the
conversations a year ago, canthis stay this good, this long?
Yes.
I said, I think it's gonna getbetter.
Alright.
And yet here we are giving upwhat we just made in the last 30
(46:43):
or 60 days and we think we shshouldn't even be in this
business.
How do we function or how do wefactor out that noise and look
long term?
And if so, what would you tellus to do in terms of expanding
the cow herd and investing ingenetics and things that we were
planning on doing until the lastweek and a half maybe?
(47:07):
I would, I will would absolutelycontinue to encourage the
industry to expand.
And I, if you look at over thelast 18 months, we've talked
about drought, we've talkedabout the high first cost of
replacement, females.
(47:28):
We've talked about the impact ofhigher interest rates on that
higher price, female.
We've talked about the age,demographics of producers, and
we've talked about thechallenges with sourcing labor.
All of those factors are legit.
But if you take the activitiesof the last 10 days in the
(47:51):
marketplace and you destroy theconfidence of that producer,
potential producer to expand, ifhe loses his confidence in the
outlook of the market, there'sno fix for that.
All those other issues.
We may not like'em but there arealternative work, there are
workarounds, a lack ofconfidence in the market.
(48:13):
There is no workaround.
So for that reason, I think theactivities this past week are
only going to delay and deferthat expansion that is so
desperately needed.
That's the irony of PresidentTrump's comment.
If that's exactly what he wassaying that we needed to do, was
(48:36):
that you've got consumer demandthrough the roof.
Prices are high, you need to getus more beef.
Yes.
He just doesn't understand thenature of the beast and that it
takes three years about from adecision made now takes five
years if we're talking aboutreplacement females, for us to
finally get beef to themarketplace.
(48:58):
If the last real hard data wehave on retail prices and
production totals it clearlybeef is still gaining market
share on the other proteins.
When we talk, you know, the timespent talking that price
disparity and what are consumersbehavior, are they trading to.
(49:21):
We can see some indications,they could be trading down that
beef value proposition tocontinue to buy beef, but we
have not, with the last harddata we are not seeing them
switch to the other proteins.
We're just not seeing it.
That goes back to compliment thepart of this conversation that
(49:44):
you were making early, early onof just how much that quality of
that product has improved andhow it's resonating with
consumers, and I don't thinkthat's gonna go away.
Now, if you go through thecenter aisles of a store today
and the number of package goodsthat have added protein or a
(50:07):
good source of protein, theprotein craze that we're seeing
today.
It, I think it's probably a, it,there will be a time that tide
crest and but to say that we'regoing to lose consumer demand
for red meats collectively, orbeef specifically?
I'm not seeing it.
Yeah, I'm not either.
(50:28):
And I would even push back alittle on the protein trend, and
maybe I'm being overlyoptimistic, but what we see
today as this quote unquotereturn to protein is...
it still hasn't gotten us backto where we were 30 or 40 years
ago as a nation when we were inpretty good shape.
Yep.
In terms of our physical,weights and health, everything
(50:50):
else I wonder if we're finallygetting back to where we had
been when we were a prettyhealthy nation and that it
actually stays and then to gofurther as a, hopefully silver
lining of this whole importedground beef thing.
Maybe that does us a favor as anindustry and keeps people buying
(51:15):
at least ground beef instead oftrading down away from the beef
complex.
And when the dust settles, welook up and go, you know what?
We moved more of our beef tallowthrough more of our fifties
through these lean nineties ofimported beef.
We didn't lose anybody.
(51:36):
And oh, by the way, we're stillselling just as much whole
muscle product and creating evenmore demand, and we're ready to
roll when we finally do get someexpansion in cows but still, I,
I think that as we look at thisfrom truly a dollars and cents
and demand standpoint, I don'tknow that it has to be this
(51:58):
crash because I think that westill have a huge amount of
customers who want to buy beefat these quote unquote high
prices that everybody's talkingabout.
We economists would discusstheir willingness to pay.
We have not yet seen any dent intheir willingness to pay.
(52:18):
I think that says it all.
I wish that we could have gottenthat message to President Trump
before some of these messages orif he says that, I wish that we
as, as ranchers would understandthat, hey, it hasn't affected
that consumer's willingness topay.
Let's not, as of counterpart ofmine used to say, let's not
break ourselves into jail andtell them that it's too
(52:41):
expensive.
Let's stay the course.
Yeah.
Let's do exactly what we wereplanning on doing in terms of
rebuilding our herd and takingopportunities to grow or
whatever the case may be,investing in things that are
gonna make us more money downthe road, and let's stay focused
on that and factor out thenoise.
I, I still think we would betotally in agreement.
(53:04):
I think the outlook for theindustry is incredibly bright.
I think there's opportunities togrow.
I think that, uh.
You're, you're dead on trackthat the focus of producers to
today with so much noise is justset it aside and, and looked
down the road.
(53:24):
'cause it still looks very evenwith ebbs and flows and market
prices, it still looksincredibly good.
Yeah I've never seen it.
I've never seen us have theopportunities from a consumer
demand standpoint in my life.
And I think it comes down to onething, and that is they finally,
for the first time since I was akid or before, they want a
(53:44):
product.
Yeah.
And, uh, quality pays and weneed to keep focusing on what
brought us here and continue tomake incremental improvements in
our efficiency and everythingelse.
But let's not give that away.
Yes.
Don, I appreciate it a bunch.
I know it's a action packedmorning and probably will be for
the next few days, but uh,appreciate your perspective and
(54:06):
your work that you do there atTerrain.
And uh, we'll keep in touch.
Always enjoy our conversations.
Matt.
Thank you.
You bet.
Thank you, Don.
Thanks for tuning in toPractically Ranching, brought to
you by Dalebanks Angus.
We are looking forward to ourannual sale on Saturday,
November 22nd.
We'll sell 153 yearling andcoming 2-year-old bulls plus six
(54:29):
elite fall yearling heifers fromthe top end of our registered
replacements.
The catalog is online andprinted copies are in the mail
now, so let us know if you'dlike one coming to your mailbox.
We'd love to have you at thesale, but if you can't make it,
we'll be online at CCI live.
May God bless you and we'll talkagain soon.
(54:50):
I.
Thanks for joining us forepisode 79 of Practically
Ranching.
I'm Matt Perrier and we arehere.
Thanks to Dalebanks Angus, yourhome for practical profitable
genetics since 1904.
Once again, I'm late with thisepisode.
No excuses, no apologies.
You know, I'm not sure you cancall a side hustle, a side
(00:27):
hustle when it's also a pro bonogig, but that's what this
podcast is and the last month orso, I haven't been able or
willing to prioritize it overthe real hustle, the ranch, the
family, and everything elsegoing on in the last few weeks.
But we are back with a reallygood discussion with Beef
(00:49):
Economist Don Close withterrain.
The past week's marketcorrection following our
president's comments about beefprices have spurred quite a few
discussions, quite a fewmeetings and infinite social
media posts.
You know, I've read and listenedto a few of these, uh, very few,
(01:11):
and I've had mixed emotionsafter I get done with each one.
You know, it brought to mindthat we started this podcast
three and a half years ago forthis type of reason.
Issues like these are usuallymore nuanced and more
complicated than an Instagramreel or a truth Social post can
(01:35):
cover.
Honestly, this one's way morenuanced than an hour podcast can
cover, but Don and I are gonnatouch on a few of the high
points as we see them.
We talk a little bit about thelast week and a half's events.
We talk about beef prices andconsumer demand.
We talk about expansion signalsand, and his article from last
(01:57):
spring, the sneaky barrier toherd expansion, big cows.
Most of all, we talk aboutperspective and confidence in
the marketplace and how the lastcouple of weeks, as tough as
they have seemed to be.
They may, may very well lengthenthis stage of the cattle cycle
(02:19):
where cow calf producers havebeen in the driver's seat and
may very well continue to be inthat driver's seat due to supply
fundamentals and the lack ofherd expansion.
You know, Don, Don and I, and Imentioned this, Don and I tried
to record a podcast late lastspring, and we had so many
technical glitches that wefinally gave up and decided it
(02:41):
may not have been meant to be,this one went better, but I
guess an episode with Donwouldn't be complete if I didn't
have some kind of technicalhiccup.
So about two thirds of the waythrough this episode, my
microphone quit working.
I didn't know it.
Uh, luckily the echo throughDon's speaker quietly captured
(03:02):
most of my portion and the goodpart, Don's, is fine, but I get
pretty faint and pretty quiet inthe last third of our
conversation.
To my friends listening, whatcan I say except,"you're
welcome." As always, Iappreciate you listening.
I appreciate your continuedsupport of this podcast and of
(03:24):
our Dalebanks Angus program.
Uh, if you would stick around atthe end for a brief bit of info
about our Bull and heifer salecoming up on Saturday, November
22nd.
Most importantly, I appreciateyour interest in the beef
community.
You know, US cattlemen are apassionate bunch, and we're
really passionate about thisbusiness, and I'm glad that so
(03:46):
many of you are willing tochannel this passion toward
progress; regardless of thenoise that might be happening
around us.
So keep up the good work andenjoy this conversation with Mr.
Don Close.
matt_2_10-27-2025_100619 (04:00):
Don, we had scheduled and tried,
what, two or three times to do apodcast this summer?
and
don_2_10-27-2025_100617 (04:07):
Yep.
matt_2_10-27-2025_100619 (04:08):
don't even remember what we were
talking about.
You'd written something and Ithought it was brilliant and I
thought, we've gotta get out,get.
On here and talk about it.
And it was a whole lot morepositive than any of the
discussions that anybody in thisbusiness has had over the last
week.
or two.
don_2_10-27-2025_100617 (04:25):
It's, uh, for the market information
business, it's been a toughweekend.
matt_2_10-27-2025_100619 (04:31):
So how in times like this and we have
to qualify this, we arerecording at 10 0 7 Central time
on Monday.
The 27th of October, because Idon't know for sure whether I'll
get this out this week or next.
And honestly, we'll probablytalk for an hour and something
(04:51):
could change significantlybefore we're done with this dang
thing.
How does a
don_2_10-27-2025_100617 (04:56):
it, and likely will.
How does a
matt_2_10-27-2025_100619 (04:57):
in times like this, sort through
the noise and what do you lookat as you have customers and
clients and producers turning toyou for answers?
don_2_10-27-2025_100617 (05:07):
I'm gonna give two answers.
The first and probably the mostprofessional answer is you've
just got to do everythingpossible to close out all of the
noise and what were thefundamentals that we were
working with a week ago, andlook at it from that
(05:27):
perspective.
The second answer again, is notnearly as professional, but I
tell clients.
There are just times that thebest thing you can do is shut
that screen off and go dosomething else.
You just got to step away longenough for hopefully the smoke
(05:50):
will clear, but just to get aclear head that you just don't
get so caught up in all thenoise.
matt_2_10-27-2025_100619 (05:57):
I was fortunate last week as the
president made his comments andas everything leading up to that
and following it occurred, wewere ultrasounding bulls and
collecting yearling data andgetting a catalog off to press,
and getting ready to clip bullsthis week, which we're doing and
(06:17):
videoing and everything else.
I've got a bull sale to getready for, and I think that was
maybe God's way of saying,"youneed to keep your nose to the
grindstone because otherwiseyou'll go down these rabbit
holes.
And really get worked up." So Iguess either fortunately or
unfortunately.
I didn't get to probably stay asclose to the goings on and the
(06:38):
markets and everything else,and, and the things that were
driving the markets.
Anybody with a heartbeatprobably knows.
But let's from your standpoint,let's recap some of the things
that have led up to what we'veseen in the last, okay.
This is Monday, the last sevento 10 days of this market.
don_2_10-27-2025_100617 (06:57):
Okay.
So we started off with I believeit was a week ago Sunday night
that on Air Force one, trumpmade a comment to reporters that
beef was too high and that he,they were gonna fix that, and
(07:20):
that the answer to that problemwas to bring in more Argentine
product.
And then they came with the, the13 page three to five point plan
from Secretary Rollins of stepsUSDA was going to take to
(07:40):
rebuild cattle, US cattlepopulation.
there, there were positivethings in there.
Are there, is there anything inthere that is a real game
changer?
No.
And then there was a text or atweet or whatever, that a, he
(08:04):
was going to increase the thetariff rate quota on Argentina.
And with that, perceptions werethat, we were going to probably
see a 50% increase or, evendouble it.
And for 24 and year to dateArgentine product was about 2%
(08:30):
of our total imports.
It was a no no, star.
We didn't expect that TRQ to gofrom uh, 20,000 metric tons to
80,000 metric tons, which was abit of a shock to the market.
So then there was some pushbackon that.
And then that's when Trump camewith the tweet that producers
(08:51):
should be thankful for him.
That industry has been doingnothing for the last.
10 to 20 years and that it washis tariff implementation that
enabled them to enjoy the pricesthey've seen for the year.
And that's when the train wentoff the rails and social media
(09:13):
exploded with the reactions fromproducers and, uh.
from that time, things we gotthrough the end of last week.
The market was down hard lastlimit last Friday, and
everything's okay, let's just,let's take the weekend and take
a breather.
And then we got uh, yesterdaymorning with all of the uh,
(09:36):
Sunday morning talking heads anduh, secretary Bessent's talking
that all the trade agreementswith taiwan, Vietnam all of
that.
And that essentially anagreement was in place with
China and that Trump and Xiwould be meeting this Thursday
(09:56):
to make finalizations.
And then there's, there'sthere's talk in the market that
president Lula from Brazil isrequesting a meeting uh, with
Trump.
This week and that that couldlead to a reduction in the 50%
tariff rate with Brazil.
(10:17):
And then the final thing uh,that immediately comes to mind
is that the me, Mexico I believeSecretary of Agriculture or
equivalent is coming toWashington this week to make a
request to open the border toMexican feeder cattle.
So the.
The massive uncertainty in themarket, whether we, you know we
(10:41):
closed last week thinking we didnot have anything going with
China.
Now we're led to think we do,but the two real the straws that
broke the camel's back as far asthe futures market goes, is the
potential to see the 50% tariffon Brazilian product be reduced
to a more functionable level.
(11:03):
And then the real one is whathappens once that uh, border's
open to Mexican feeder cattle.
matt_2_10-27-2025_100619 (11:10):
So there's a lot there.
I wanna
don_2_10-27-2025_100617 (11:12):
Yes.
matt_2_10-27-2025_100619 (11:13):
the first one and I guess I'm gonna,
i'm gonna show my true colorsand my opinion, and I made a
post for those who follow me or.
Our Dale Bank's, Facebook,Instagram accounts.
I made a post about this Friday.
The thing that is mostfrustrating to me about this
whole thing, president Trump'scomments, the ensuing debates
(11:36):
and, mudslinging on social mediaand meetings and everything else
across the nation.
The thing that I think gets lostis the quality portion of the
beef price today.
and that to me is reallyunfortunate because as we go to
comparing what beef is pricedtoday, especially compared to 20
(11:59):
and 30 years ago, like thepresident has claimed If I had
the opportunity to sit down withPresident Trump, which I won't,
but the first thing I would sayis, Mr.
every business dealing, everypersonal dealing, every dealing
that I've seen you do over thelast decades Has had one thing
(12:20):
in common, and that is you likequality.
Golf courses, real estatehotels, nobody.
And certainly you wouldn'texpect to go in and renovate a
hotel, reopen it, which he'sdone.
And turn it into the highestquality experience that anybody
could take part in, and thencharge the same room rate that
(12:44):
it was when it was the CommodoreHotel in 1970, whatever, when he
bought that before he turned itinto the Grand Hyatt in New York
City.
We have done that with beef.
If you look at what we wereselling in 19 96, 30 years ago.
You can't even compare it towhat we're selling today.
And so guess what?
(13:04):
That price should be higher andconsumers have rewarded us for
doing that.
You talked, you and I talkedabout this the last time we
visited a couple years ago, thatconsumers like quality.
And they are willing to pay forit.
Why in the world would anybodythat has had the success
marketing quality that DonaldTrump has, try to compare that,
(13:27):
make that comparison.
And so that's the thing that Iwould like us to be talking
about as an industry.
Not, these posts that say well,our costs are higher, so we
should get paid more.
Well, That's not how the marketworks.
The market tells us what we'regonna get based off of what the
consumer is willing to pay.
And my question to you as aneconomist, when you look at the
data, is beef too high?
don_2_10-27-2025_100617 (13:50):
I do not believe beef is too high.
Hard Stop.
And why I say that, there's beena flurry of charts throughout
the marketplace over the lasthandful of weeks, but.
We've all been talking about thenumber of minutes
matt_2_10-27-2025_100619 (14:09):
Yeah.
don_2_10-27-2025_100617 (14:09):
work to, to afford a pound of beef
and those, depending on whetherwe're talking ground beef prices
or if we're talking all freshbeef price, choice beef, there,
there's small differences indetails, but the bottom line is
for this 30 year period thatyou're talking about.
(14:30):
As wages and affordability hasincreased, beef prices have
essentially gone up at exactlythe same rate as that average
hourly wage.
So the minutes required to workhasn't varied.
Four minutes in the last fourfour minutes to and varying
(14:52):
between 11 and 15 depending onwhat data series we're looking
at.
But we're talking the averagehourly wage is working 11 to 14
minutes to buy a pound of beef,and that has been true
throughout this 30 year windowthat you're talking about.
So if, if I'm thinking theaverage guy's gonna work 14
(15:16):
minutes to afford a pound ofbeef, is that going to be a deal
breaker on whether he buys ordoesn't buy?
No.
matt_2_10-27-2025_100619 (15:27):
So is there something else, in your
opinion, and now we're probablygetting a little more on the pol
political side of things and notthe economic side, but is there
something else at play here thatwe're missing?
We're, know, seeing the abilityor President Trump seeing the
ability For beef to be a hugenegotiation I hate to use the
(15:50):
word pond, but uh, somethingthat he can use in his favor to
get something else clear outsideof the beef industry from
Argentina, Brazil, wherever thecase may be.
don_2_10-27-2025_100617 (16:05):
I think there are a couple of things and
one of those two was answeredover the weekend.
I think when he makes thecomment that he likes melee and
he would, he wanted to see himreelected to have.
One spot of democracy in centraland South America.
I believe that's a truestatement.
I also think if you look at thedeals that he's making in
(16:30):
regards to the trade agreementwith Australia, a part of the
trade agreements in SoutheastAsia, I think a real key driver
in this whole, the backstory inthis whole thing.
Has been, he's scrambling to getaccess to those rare earth
elements that have try to that'sthe ingredient that makes this
(16:54):
whole artificial intelligencething run.
And I think that he's lookingforward to come up with enough
alternative supply that whenChina says, we're no longer
going to offer those rare earthelements.
To other countries.
He has a solution and a pushbackto China.
(17:15):
I think that's a huge driver inthis whole story.
matt_2_10-27-2025_100619 (17:18):
Have we as a as a, beef industry, in
your time as an economist, havewe ever been used as that ace in
the hole by a president that canget something else because, or
thanks to the product that we'reproducing?
don_2_10-27-2025_100617 (17:35):
Oh, we could probably do twist on that
and have we been used to that inthat manner?
It certainly doesn't come tomind but I think back to my
limited memory of the Nixon'sprice freeze and how much we as
industry thought that cattle andbeef prices would soar once that
(17:58):
price freeze was lifted andfound just the opposite.
The other example that I wouldgive specifically to the beef
side that we were used as a pawnis the whole herd, dairy buyout
and the quantity of beef thatdumped on the market.
The beef cattle sector wasclearly used as a pawn and
dumped on in that occurrence,
matt_2_10-27-2025_100619 (18:19):
supply side moves.
And that's the thing that.
On one hand, I guess I puff mychest out and go, wow, look what
we did.
We are now something to be soproud of that we can get
something else from our tradingpartners.
I don't like it, but I've neverseen in my life, I've never seen
(18:42):
beef in such demand that we getto quote unquote, be used to get
something else that societyneeds in the United States of
America.
And so I guess kudos to us.
Great work, although it reallysucks in the short term.
And that's something that Ithink that um, we are so
ingrained as ranchers, as feedyards, as everybody in this
(19:04):
industry at looking things froma supply side.
Why is beef high?
Oh it's because we don't havemany cows.
Oh wait, we're producing just asmany pounds as we have.
We haven't hit the tightsupplies by keeping a bunch of
heifers yet.
And so all of this being drivenby demand it's really
interesting to me because yeah,those are the two things that I
(19:24):
go to as well.
The dairy buyout, the pricefreeze in the seventies and
eighties that led to some majorturmoil in the beef industry.
But those were supply sideinitiatives.
This one's demand, this is'causepeople want our product and want
access to our market.
It's a different animal.
don_2_10-27-2025_100617 (19:43):
Earlier on we were talking about, okay
what has been the chain ofevents over the last week?
And I think, if you look at the,at the cattle community as a
whole agriculture really butspecifically the cattle industry
have been as big a Trumpsupporters as have as has been
(20:05):
out there, no doubt.
And.
The whole mantra from when hefirst went down the escalator
was to make America great again,but to then turn around and to
his loyalist supporters and say,we're gonna make America great
again.
in everything except beef, wecan bring in Argentine beef.
(20:27):
I think that's where the realsense of betrayal came from in
this, this last week activities.
matt_2_10-27-2025_100619 (20:34):
no doubt.
And I think that's the onething.
I mean, He has united allsegments, all producer groups,
almost all, because they,everybody feels the same way.
I mean, It was a slap in theface.
And I think the principle of itis the most frustrating.
Again, I look at it from asupply and demand, especially
demand reward for quality, allthese different things.
(20:57):
None of it makes sense.
from what we have heard from thepresident.
And that's why I say that.
And I've seen the post somepeople saying that, president
Trump, like his character ornot, he always has a strategic
plan in order and there's awhole lot of noise that
surrounds that.
Sometimes I think that takespeople's eyes off the ball.
(21:20):
So that he can get done what hewants to get done but there is
something at work here that hehas a plan, hopefully.
For the better of all of us.
But yeah, it is doggonedifficult to reason the
comments, the moves obviouslythe fallout on the futures board
and things like that as we go.
(21:41):
So whether we're talking aboutArgentine beef, when we throw
the Brazilian piece in there,that changes it significantly, I
would say, in terms of volume,because again, Everybody's
already probably seen just howlittle volume Argentina could
probably send us if theycontinue to consume at the rate
(22:01):
that Argent have always consumedmeat and beef.
F let's just go with what weknow.
Or if it's just Argentine beef,does that really affect the
market?
From a supply of beef at all?
don_2_10-27-2025_100617 (22:15):
No.
When I went through and I lookedat at the various tariff rates
and the escalation, if you addin there, the fact that whether
they're enforcing it or not isunknown, but Argentina has a
6.75% export tax on product.
(22:38):
If you add our.
T escalated tariff rates plusthe 6.75% export tax from
Argentina.
I can actually make a mark anargument that product delivered
to the east coast it, most ofthat product goes into
(22:58):
Philadelphia, but for east coastdelivery, it would actually be
higher than where our domesticnineties are trading today.
N no, it's a, it's, it is a washat best.
I'm not really sure exactly themath that was used, I've seen
one breakdown that, that showsmaximum it could increase ground
(23:21):
beef prices by 6 cents.
I, I, I'm not even there.
I say it significant.
No, it's, it is not a, that'snot a game changer.
matt_2_10-27-2025_100619 (23:31):
Let's throw Brazil out there and if
that is part of the deal andthey get reduced tariffs and it
is able to come this way, thenwhat, what is your calculus on
that?
don_2_10-27-2025_100617 (23:46):
The most honest answer I can give
Matt is, I don't know, is it bigenough to be a game changer?
Undoubtedly, yes.
But to take that that tariffrate from.
Like 74%, 74.6% down to anunknown level, we don't know.
(24:07):
So we're at this juncture, wesimply don't have the
information available to evenmake an estimate on what that
amounts to on just availablequantity, could we be talking.
10,$20 maybe.
matt_2_10-27-2025_100619 (24:28):
And the beef that would come from
Argentina and brazil, correct meif I'm wrong, would be almost
solely 90% lean trim correct?
For grinding beef.
May I ask you a philosophicalquestion going forth, should
choice beef choice.
High choice in prime, I wouldsay.
(24:49):
Should that be separated from aretail, from a consumer, I
should say standpoint from grindfrom hamburger?
Are those two differentproducts?
In other words, people willtrade down from hamburger to
chicken breast, but they may nottrade down from a strip steak to
chicken breast, and if so, howdoes that change how beef market
(25:11):
prices live?
Cattle fed cattle.
Feeders et cetera, et cetera.
How does that change with theseimports and thoughts about that?
Because they're probably notgonna be competing with that
part.
of it.
don_2_10-27-2025_100617 (25:23):
Youve just asked an incredibly
difficult question to answer.
My, my answer to you is andessentially, correct me if I'm
wrong, but what I think you justdescribed was mCOOL..
Huh.
(25:43):
And do I think that productshould be segregated?
No, I don't and I give thatanswer because of, we saw from
when Cool was implemented thatconsumers may say they want that
(26:05):
differentiation or label.
But at the end of the day, priceis what drives that purchase,
and they said they didn't care.
The other side of that is thecomplexity of that whole ground
beef complex and the quantity ofthat product that is actual
(26:28):
grind and trimmings from the fedbeef sector.
The just roundhouse term of 55%of that product that comes from
our domestic non-ED slaughter,and then the balance of that
product that comes from importsand exports, or I'm sorry, from
imports to be able to reallydistinguish those products and
(26:52):
the added cost that's requiredto have those products labeled.
I, I just I don't think thejuice is worth the squeeze.
matt_2_10-27-2025_100619 (27:02):
Your your, white paper that first
introduced me to you, howevermany decades back Ground Beef
Nation might deserve dusting offand a reread.
If I thought that was where youwere going after I had asked my
question.
cause I wasn't trying to leadinto an MCO l discussion, but,
don_2_10-27-2025_100617 (27:22):
lead into no but you trust me.
You are not the only one thathas has reached out or made
comments that there was moregoing on there than what we
thought.
Hopefully.
matt_2_10-27-2025_100619 (27:35):
it's to me, as we talk to folks
about.
Quote unquote, beef beefconsumption,we have to recognize
that while we are all very proudof the huge gains that we've
made in the quality and theconsistency of whole muscle
cuts, and the demand that we'vebuilt because of it and the
(27:57):
profitability that it isintroduced into the beef chain
because of it.
Are we still at 60% beefconsumption is grind, is
hamburgers?
don_2_10-27-2025_100617 (28:10):
I, in my opinion, yes, we are, and I
actually had that conversationwith a retailer over the weekend
and was trying to get an answerout of them of what percentage
of their sales were groundproduct.
Industry-wide, we talk, I thinkevery, the most common response
(28:32):
to that question is 50, 55%.
If we really take a breakdownof, of how that product's used
and the peg board add the pegboard items in there.
In my personal view, it's closerto 60, but that's, we're talking
5% difference here.
matt_2_10-27-2025_100619 (28:48):
or
don_2_10-27-2025_100617 (28:48):
And That's volume?
Now.
One thing too that we need toincorporate into this part of
the conversation is a hugedriver in what has enabled fed
cattle prices to get to thelevel we've seen this year is
(29:09):
because of this shortage ofgrinding material that we're
talking about industry has hadto grind an escalated volume of
chucks and rounds that havepulled those muscle cuts off
the, off of the market limitingthat supply.
(29:30):
So the contribution made fromChuck and round items to overall
cutout, that's been a, a hugedriver in this whole equation.
matt_2_10-27-2025_100619 (29:40):
Well, It has, it has made for some
interesting demand and supplydiscussions.
And I think anytime we havesomething like this that causes
us to ask those questions and toargue and debate, whether it be
online or face-to-face or phoneconversations or whatever, I
think it's good.
I don't like the catalyst andthe way we got here, but I
think, it's it's beenfascinating to me just how many
(30:04):
ag economists and beef supplyexperts have come outta the
woodwork in the last 10 days.
I, I mean, Some posts from
don_2_10-27-2025_100617 (30:13):
I mean most from
matt_2_10-27-2025_100619 (30:15):
even in the cattle business that have
all the answers.
And I'm like.
don_2_10-27-2025_100617 (30:21):
And I'm like,
matt_2_10-27-2025_100619 (30:22):
if it wasn't
don_2_10-27-2025_100617 (30:23):
this is wasn't
matt_2_10-27-2025_100619 (30:25):
to some people's bottom line that
are trading on these futureboards this week, or selling
calves even.
This is.
Great entertainment.
It's very comical to watch allthese experts come outta the
woodwork.
don_2_10-27-2025_100617 (30:38):
Tell you what when some of these uh,
huge developments occur in thisrapid of succession I'm about
ready for, have some of thoseexperts come out, they can have
it.
I, this let me off.
matt_2_10-27-2025_100619 (30:52):
Yeah, as a, as an Ag
don_2_10-27-2025_100617 (30:54):
Yeah.
matt_2_10-27-2025_100619 (30:55):
person told me last week when I texted
a question to them, they justsaid.
Can I get off this ride?
It's it's maybe gotten tospinning a little too fast.
So when I called you lastspring, and I had to dig this
email back up.
This was in April that I hadread a, an article that you had
(31:18):
published in CB's newsletterthat was titled The Sneaky
Barrier to Herd Expansion.
And that's what I wanted to talkabout then.
don_2_10-27-2025_100617 (31:30):
then.
Yep.
matt_2_10-27-2025_100619 (31:30):
Has your, first of all, let's talk
about what that sneaky barrieris and was, or the barriers.
And then I guess with the weektwo weeks events and turns, do
you still see that?
And where do you see expansiongoing from here?
Given all of the things that weknow on October the 27th at
(31:52):
10:37 AM.
don_2_10-27-2025_100617 (31:55):
There, there's several questions folded
up into that from when Ipublished that article last
spring, early summer.
My, my view on that topic hasonly solidified, I think that
the abil, the number of headthat we can graze per unit has
(32:17):
been, cut back and limited justbecause of the added consumption
of the additional, let's justsay, two to 300 pounds on the
average cow.
matt_2_10-27-2025_100619 (32:28):
Yeah, just make, sure in case people
didn't read that sneaky barrieris that it takes more land to
run a cow today, and that's whywe haven't expanded more
don_2_10-27-2025_100617 (32:39):
It, it, we can say it takes more land
or.
And as I think about it, becausemost producers have a fixed
number of accessible acres, Ilook at the reverse of the
equation and we just can't runas many cows on the fixed unit
as what we did
matt_2_10-27-2025_100619 (32:57):
Okay.
don_2_10-27-2025_100617 (32:58):
1975.
matt_2_10-27-2025_100619 (32:59):
And so, as you have solidified that
opinion where do we go?
From here.
Do we see a change, major changein management and delivering the
nutrients to those cows?
Do we see a change in size andmetabolic needs of those cows?
Where's the economist's seat?
Say we're going from here.
don_2_10-27-2025_100617 (33:22):
I don't know that, that we've been on So
running so hard on that, on thattrend that, that, I don't know.
It, It is like all these otherthings that this isn't a quick
fix.
Now we don't have, we haven'thad any data now going on, you
know, because of the governmentshutdown.
But we've made the commentthroughout this conversation
(33:42):
that beef production isessentially unchanged with the
reduced number of cattle becauseof increased carcass weights.
We're down a couple of percentit we could be down as by years
end, we could be down as much as4% on beef production for the
year.
So it, we've done an amazing jobof keeping production steady but
(34:06):
the weight of that, ofcontinuing making cattle bigger
and having a quicker rolloverit's starting to weigh on us,
we're struggling harder to keepthat beef production level un
changed so that, that's, thatneeds to be brought out.
As we go, you know, and I, Ithink about it and I'm going
down an area that you are, youare way, way more professional
(34:29):
in than I am.
But for so many years when a guyhas gone and looked through his
calf crop to select thoseheifers, he's going to retain.
He picks the biggest, fastestgrowing heifers in the pen.
(34:49):
And so we've just, we forcedthis increase in, in cow weight
by genetic selection.
I think that's been a driver.
The other challenge I see withthat is if we were to go, if, if
we were to go back and talk.
To try to sell a customer a penof bred heifers, and we're
(35:14):
trying to sell him somethingthat's going to have a mature
body weight, cow weight of,let's just say 10 50 to 1150.
They couldn't drive off theplace fast enough.
matt_2_10-27-2025_100619 (35:28):
Yep.
Been there.
don_2_10-27-2025_100617 (35:30):
There we've created a lot of
challenges in this whole thing.
I, you know, I, I read articlesand I talk about, and the
articles talk about.
The number of cows that can becarried on a unit and the number
of saleable pounds of productfrom a set of moderate weight
(35:51):
cows to the number of pounds ofsaleable product from a large
set of cows.
And there's actually more, moresaleable pounds from the herd of
smaller cows with more numbersthan there is the bigger cows.
I believe that's true.
I really believe that's true.
matt_2_10-27-2025_100619 (36:10):
how much, we go back to last week's
announcement by the Departmentof Ag and trying to open up some
western lands, public lands,some CRP.
How much does that help?
and that's a very regional, andagain, I told somebody the other
day that called, was all up inarms about this, and I said, you
know, it's been a long timesince we've had a east versus
(36:30):
west battle in cattleassociations and policy
discussions.
But this may cause that becausethis is gonna pick some winners
and losers in the ability toexpand if you have access to
those acres as compared tosomebody in my area where we
don't have either CRP or publicgrazing lands, that our guys
(36:51):
will go, eh, I don't get theopportunity to take on more just
right here next to.
Me.
don_2_10-27-2025_100617 (36:59):
You are way more optimistic from the
impact of that announcement thanI am to, can we open up some
acres?
Can we make life better morefunctionable for that Western
producer with the policies thatwere in that 13 page document?
Yeah, I believe so.
(37:20):
Is there gonna be enough groundopen up to radically change cow
numbers?
I'm just not there.
Okay.
Yeah, and you may be right.
I just, that's one of those thatfrom the outside looks like it
could be, but maybe it may notbe.
I, and I'm talking above myknowledge level here, but I
(37:43):
just.
While there clearly areexamples, that increased grazing
could be helpful.
But I just think if you takefence quality, if you take just
how fractured a lot of thatground is the functionality or
usability of a lot of thatpublic lands, I still think is
going to be a challenge.
(38:04):
Yeah.
So let's change gears for just aminute.
We're gonna go back a little bitas we talk about importing,
lean, trim, and grind.
Do we today, and I really do notknow the answer to this.
Do we have an excess of beeftallow as we increase these
(38:25):
carcass weights and have allthis additional fat on these
heavier carcasses?
Are we using all that in grindor for something else that we're
refining?
And if not, does that increasethe value of beef Tallow enough
that we make a little more offthe carcass because outta a
demand for the white fat.
(38:45):
I first to answer the question,we have a massive excess of fat.
Okay.
I figured we did ma massive.
I have heard, I've heard thecomment has been made to me by
some incredibly credibleindustry leading meat science
(39:07):
folks that when we take a 1600to 1700 pound steer, one third
of his live weight is fat.
That's including internal?
Yes.
Yeah, so that's a per that'stotal pounds of fat against his
live body.
(39:27):
Weight is fat.
So we got plenty to go around.
Yes, just.
Whether it's that much morevaluable as grinding fat to go
in with those nineties to make aso 80 20, 70 30, whatever the
case may be.
We're, we were getting to thepoint of minutiae, but back when
(39:47):
we were having that whole groundbeef conversation and blending
rates, one thing that we did notsay in that is if we do.
See increased product fromArgentina, whatever that
quantity's gonna be.
If we do see a more livabletariff rate from Brazil and that
(40:11):
product starts coming back in,so we get that supply of
nineties, it's going to be pricesupportive to 50% lean.
Now, is that a sva?
Is that gonna save the farm?
No.
But to keep, when you lower theprice of nineties, you're going
to increase the price offifties.
(40:31):
Fifties, okay.
One, one other thing that I do,I really think there is merit
to, I think, the wholeregenerative renewable diesel
thing.
I just I don't get it.
But I do think the re the publicdebate on food safety with seed
(40:54):
oils and the number of peopleand restaurants starting to go
back and use beef tallow as afrying oil, I think we could see
see measurable improvement.
And it's not gonna be a gamechanger, but I think we could
see measurable improvement tocut out.
(41:15):
By during, by bringing thosedrop credits up.
When Secretary Kennedy, it wasbefore he was Secretary Kennedy,
I think it was on the campaign,started talking about that and
Steak and Shake or whicheverYep.
Smaller burger chain announcedthat they were gonna switch to
beef towel for their, for thefryers.
Friars.
I had a fellow cattleman say.
(41:37):
This could be absolutely hugefor cattlemen, and I haven't
heard anybody since thenpublicly say that, Hey, we could
see a major profit driver be onthe fat, the 50 even the
straight fat.
Yep.
Yeah, I, I haven't heard anybodyelse talk about that, but I'm
glad that you brought it up andI don't know to say that it's
gonna be a, a game change.
(42:01):
It's not gonna be.
A mega price impact, but it willit be an escalating contributor?
I do believe that's correct.
Every little bit helps,especially when we get to
talking about drop credits andthings like that because that
goes a long ways to even justpaying for the processing Yes.
Of these things.
That brings up another questionand you may or may not track
(42:25):
this, I know AX does, andseveral do.
Do you on a monthly basis orannual basis track where we see
estimated profitabilities at allthe different segments in the
beef chain from retail typeprocessor feed yard on down.
I'm absolutely interested everyyear to see the cattle facts
(42:45):
result.
I don't run that calculationpersonally.
Okay.
But I do.
But I do value them doing it.
It's been comical to me the lastweek of seeing some of these
posts as some of our cow calfproducers that will cast blame.
And we're not the ones thatshould be losing all this
(43:06):
profitability when the packer ismaking what they're making right
now.
And I just stand there.
Slack job going, I wouldn't wantto know.
What packing processing segmentsare losing today given the high
price of fed cattle andeverything else.
And so I didn't know if you hadaccess to that, but I would say
(43:27):
it's negative.
It's just a question of hownegative it is right now.
Correct.
Let's just call it 200 to$250today.
And it, and earlier in thesummer it was on top of 300.
Yeah.
Yep.
That's and they made a lot ofI'm not making excuses.
Because they made a lot of moneyfour years ago.
Yes.
And I get that.
Hopefully they've still beenable to use some of those
(43:50):
coffers to get through the lientimes.
But yeah, this would be a timethat I would not want to own a
large, any size of packingprocessing plant.
I have you have an idea, but youknow, the, the overwhelming
majority of my customer contactis with individual producers and
primarily cattle feeders.
(44:12):
But over the last year, I havehad more interaction with beef
packers.
That are looking for aperspective of market
contraction, where we're at withexpansion and just as they're
trying to work on this wholemargin thing they, the, it is a
(44:33):
huge hurdle.
And you said it, what we, whatwe're seeing, they all made
tremendous amounts of moneythrough COVID and Okay, fine.
But what we've seen, they,they've all spent some money on
CapEx, but they've dividedthemselves into those that set
on the money waiting for thisday to happen.
(44:55):
And those plants that have spentlarger quantities on capital
expenditures and trying toincrease efficiency to get their
self through this tight supply.
So essentially we've got twobattles going on today.
We've got those that betweensetting on the money and capital
expenditures, and then we havethe battle of the old existing
(45:18):
plants that's setting ontremendous cash resources
against the new startup plants.
So there's a couple of differentbattles going on there, and
quite often in that segment,those folks are constantly
looking long term.
Yep.
They're looking.
Five years, 10 years down theroad and saying, where are we
gonna be?
(45:38):
Yes.
And I, and quite often myneighbors are looking five years
behind and comparing to where wewere and what we were doing and
it's frustrating to me that wehave that habit.
It.
As running cows, but I thinkit's probably because we've used
Mother Nature and we've usedtrends and things like that to
(46:02):
teach us, and quite often thatmakes it harder to look long
term.
This discussion we're lookingat, as I speak on the futures
board,$2 and 27 cents livecattle and$3 and 46 cents feeder
cattle.
And considering that a trainwreck.
(46:23):
Yep.
Sure.
When we, if we just looked backsix months or a year.
Yep.
When we thought times were, Imean I remember the
conversations a year ago, canthis stay this good, this long?
Yes.
I said, I think it's gonna getbetter.
Alright.
And yet here we are giving upwhat we just made in the last 30
(46:43):
or 60 days and we think we shshouldn't even be in this
business.
How do we function or how do wefactor out that noise and look
long term?
And if so, what would you tellus to do in terms of expanding
the cow herd and investing ingenetics and things that we were
planning on doing until the lastweek and a half maybe?
(47:07):
I would, I will would absolutelycontinue to encourage the
industry to expand.
And I, if you look at over thelast 18 months, we've talked
about drought, we've talkedabout the high first cost of
replacement, females.
(47:28):
We've talked about the impact ofhigher interest rates on that
higher price, female.
We've talked about the age,demographics of producers, and
we've talked about thechallenges with sourcing labor.
All of those factors are legit.
But if you take the activitiesof the last 10 days in the
(47:51):
marketplace and you destroy theconfidence of that producer,
potential producer to expand, ifhe loses his confidence in the
outlook of the market, there'sno fix for that.
All those other issues.
We may not like'em but there arealternative work, there are
workarounds, a lack ofconfidence in the market.
(48:13):
There is no workaround.
So for that reason, I think theactivities this past week are
only going to delay and deferthat expansion that is so
desperately needed.
That's the irony of PresidentTrump's comment.
If that's exactly what he wassaying that we needed to do, was
(48:36):
that you've got consumer demandthrough the roof.
Prices are high, you need to getus more beef.
Yes.
He just doesn't understand thenature of the beast and that it
takes three years about from adecision made now takes five
years if we're talking aboutreplacement females, for us to
finally get beef to themarketplace.
(48:58):
If the last real hard data wehave on retail prices and
production totals it clearlybeef is still gaining market
share on the other proteins.
When we talk, you know, the timespent talking that price
disparity and what are consumersbehavior, are they trading to.
(49:21):
We can see some indications,they could be trading down that
beef value proposition tocontinue to buy beef, but we
have not, with the last harddata we are not seeing them
switch to the other proteins.
We're just not seeing it.
That goes back to compliment thepart of this conversation that
(49:44):
you were making early, early onof just how much that quality of
that product has improved andhow it's resonating with
consumers, and I don't thinkthat's gonna go away.
Now, if you go through thecenter aisles of a store today
and the number of package goodsthat have added protein or a
(50:07):
good source of protein, theprotein craze that we're seeing
today.
It, I think it's probably a, it,there will be a time that tide
crest and but to say that we'regoing to lose consumer demand
for red meats collectively, orbeef specifically?
I'm not seeing it.
Yeah, I'm not either.
(50:28):
And I would even push back alittle on the protein trend, and
maybe I'm being overlyoptimistic, but what we see
today as this quote unquotereturn to protein is...
it still hasn't gotten us backto where we were 30 or 40 years
ago as a nation when we were inpretty good shape.
Yep.
In terms of our physical,weights and health, everything
(50:50):
else I wonder if we're finallygetting back to where we had
been when we were a prettyhealthy nation and that it
actually stays and then to gofurther as a, hopefully silver
lining of this whole importedground beef thing.
Maybe that does us a favor as anindustry and keeps people buying
(51:15):
at least ground beef instead oftrading down away from the beef
complex.
And when the dust settles, welook up and go, you know what?
We moved more of our beef tallowthrough more of our fifties
through these lean nineties ofimported beef.
We didn't lose anybody.
(51:36):
And oh, by the way, we're stillselling just as much whole
muscle product and creating evenmore demand, and we're ready to
roll when we finally do get someexpansion in cows but still, I,
I think that as we look at thisfrom truly a dollars and cents
and demand standpoint, I don'tknow that it has to be this
(51:58):
crash because I think that westill have a huge amount of
customers who want to buy beefat these quote unquote high
prices that everybody's talkingabout.
We economists would discusstheir willingness to pay.
We have not yet seen any dent intheir willingness to pay.
(52:18):
I think that says it all.
I wish that we could have gottenthat message to President Trump
before some of these messages orif he says that, I wish that we
as, as ranchers would understandthat, hey, it hasn't affected
that consumer's willingness topay.
Let's not, as of counterpart ofmine used to say, let's not
break ourselves into jail andtell them that it's too
(52:41):
expensive.
Let's stay the course.
Yeah.
Let's do exactly what we wereplanning on doing in terms of
rebuilding our herd and takingopportunities to grow or
whatever the case may be,investing in things that are
gonna make us more money downthe road, and let's stay focused
on that and factor out thenoise.
I, I still think we would betotally in agreement.
(53:04):
I think the outlook for theindustry is incredibly bright.
I think there's opportunities togrow.
I think that, uh.
You're, you're dead on trackthat the focus of producers to
today with so much noise is justset it aside and, and looked
down the road.
(53:24):
'cause it still looks very evenwith ebbs and flows and market
prices, it still looksincredibly good.
Yeah I've never seen it.
I've never seen us have theopportunities from a consumer
demand standpoint in my life.
And I think it comes down to onething, and that is they finally,
for the first time since I was akid or before, they want a
(53:44):
product.
Yeah.
And, uh, quality pays and weneed to keep focusing on what
brought us here and continue tomake incremental improvements in
our efficiency and everythingelse.
But let's not give that away.
Yes.
Don, I appreciate it a bunch.
I know it's a action packedmorning and probably will be for
the next few days, but uh,appreciate your perspective and
(54:06):
your work that you do there atTerrain.
And uh, we'll keep in touch.
Always enjoy our conversations.
Matt.
Thank you.
You bet.
Thank you, Don.
Thanks for tuning in toPractically Ranching, brought to
you by Dalebanks Angus.
We are looking forward to ourannual sale on Saturday,
November 22nd.
We'll sell 153 yearling andcoming 2-year-old bulls plus six
(54:29):
elite fall yearling heifers fromthe top end of our registered
replacements.
The catalog is online andprinted copies are in the mail
now, so let us know if you'dlike one coming to your mailbox.
We'd love to have you at thesale, but if you can't make it,
we'll be online at CCI live.
May God bless you and we'll talkagain soon.
(54:50):
I.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.