Cow-calf producers have an opportunity to initiate a dynamic shift in the U.S. beef cow herd during the rebuilding process, according to a new RaboResearch report. In fact, report author Charlotte Talbot, animal agriculture sustainability analyst for RaboResearch, said management decisions made now will shape the next decade of production.

“Investing in productivity and efficiency now while margins are favorable can lower barriers to adopting new practices and innovations, strengthen operational resiliency, and open avenues to explore value-added revenue streams. Producers who delay investments could risk loss of early adopter rewards and face a less advantageous market for implementing new strategies as the cattle cycle progresses,” Talbot noted.

Emerging factors such as sustainability will distinguish this rebuild from past herd expansions. Talbot said cow-calf producers will need to assess their involvement in sustainability initiatives. This may include adopting management strategies that boost productivity, testing new innovations, or staying the course while awaiting more certainty.

Pasture and rangeland management, advancing herd genetics and monitoring, and capitalizing on emerging technologies and incentives are three areas that are uniquely positioned to achieve productivity, efficiency, and resiliency, she added.

Risk remains high due to elevated costs of replacement females, high interest rates, weather uncertainties, and the potential for some producers to exit the industry, but Talbot suggests opportunities will continue to emerge for producers who distinguish their business strategy. In fact, she said the herd rebuilding provides a unique moment for the cow-calf segment to assess production pressures in order to build back better.

Uncertainty creating hesitancy

While the Biden administration has allocated $19.5 billion for agriculture producers to participate in voluntary conservation program or adopt climate-smart practices and corporations have announced incentives, the beef sector remains hesitant to respond to sustainability demands, according to the report. Furthermore, political uncertainty and the question of “who pays” still being debated only adds concern. Even so, sustainability efforts march on.

Over the next decade, Talbot said sustainability will be a more urgent topic compared to past cattle cycles as the 2030 and 2050 climate deadlines near. The sector will require a collaborative system approach to identify and act on the numerous forces that shape cattle production, she added.

“With an adaptive, trial-and-error mindset, producers can better navigate the risks associated with cattle production and ultimately reap the long-term benefits of a more productive and sustainable operation.”