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Enjoy every hamburger you eat.  The way things are going, it could be your last.  From Lee Wells at Wells Cattle Co. in Rockwall, Texas:

From Lee Wells at Wells Cattle Co. in Rockwall, Texas:
 

Beef prices are at an all-time high, and there is no clear plan to stabilize the industry. While some ranchers are too busy running to the bank with their profits, others realize there is a serious problem on the horizon.
 
America, once the leader in beef production, is now officially dependent on imported beef to survive. This month, possibly for the first time in our history, we imported more beef from Brazil alone than we produced in-country! That was just one country of import; we receive beef from many other countries. Don’t bother to look for a label that says where your beef is from; you will never know the specific meat’s origin since the “country of origin labeling” requirements were removed in 2015.
 
Today, America is at a 75-year low on beef cattle in our production pipeline!
 
This is especially troubling when we look at our growth numbers being lower than normal, with only about 200K head coming back into the total last year, and maybe 400K expected this year. Those are not great numbers for digging out of such a deep hole. Also, consider a recent study that shows only 39% of US cattle producers plan to increase herd size at all, and just 8% plan to increase significantly. This is not an issue that will heal itself.
 
Think back to the beef industry demand in the 1950s, and we have to agree that it is a completely different world today! It is crazy to admit that our cattle population numbers match those from when our parents or grandparents were kids. For better or worse, we eat far more beef today than we did then. Also consider that there are significantly more people on earth now, and many enjoy a lifestyle of a high-protein diet, causing beef demand to be even higher today than at any other time in history.
 
A quick AI search shows that if McDonald's began serving only US beef today, it would deplete the entire market in a matter of months. This is a startling revelation to most people. It should be a wake-up call for all of us. We are probably only 2-4 weeks removed from a total breakdown of our American way of life. If supply chains break down (as we remember from 2020), we are only days away from bare shelves in our markets. As the Secretary of the USDA, Brooke Rollins, said this week, our food shortage is a matter of national security.
 
I do not say these things to bring fear, but to bring awareness.
 
Ranchers will not readily admit the problem because we are finally making money. Let’s be honest, for years, cattlemen were one drought away from bankruptcy. But today we see real money being paid for our calves and almost anything else on four legs. We do not want to interrupt this success. However, almost everyone in the business also knows how dangerous these times really are.
 
So what is the solution? I have been preaching for many months that we need to hold back our heifers. I have told every lawmaker and policy writer I have spoken with that we must get our cattle population numbers up, and the only way to do that is with cattle operations’ keeping heifers to breed.
 
The core issue here is the simple economic principle of “supply and demand.” Our supply is so low that buyers are fighting to fill the processor’s orders. There are not enough cattle to allow the market to cool off, so the price per head keeps climbing month after month, year after year. Every week, a series of social media posts brag about another sale or market that broke historic highs.
 
The issue is that cattle are a commodity, and as such, they need to stay in a balance of value. It is an ecosystem of balance. When beef is too costly on the hoof, eventually it becomes “caviar” in the store. We are dangerously close to beef’s becoming unaffordable to the American family. If something doesn't change soon, beef will cease to be an option for dinner for many Americans.
 
Let me be clear. I would never want cattle to plummet to the lows we have seen before. That would be devastating to the entire market and every producer. This issue needs to be remedied correctly and with a clear and concise plan of action.
 
I am hearing rumblings of a USDA program that will incentivize ranchers to hold back their heifers for a year or two to help with the supply crisis. I believe this is the only way we will see any market correction. I have never seen the USDA work with surgical precision. However, I am praying this can be monitored and the correct actions made with real thresholds in place to keep the market strong but viable for all involved.
 
I have asked a friend to request a call for me with the USDA office in DC today. I would love to talk directly with Brooke Rollins about these concerns. I hope she has the time to chat for a minute. I have spent days thinking through this topic and many hours on the phone with people who are as concerned as I am about the state of our beef industry.
 
Finally, ranchers are some of the best humans on earth. They do this work every day to feed our nation and never want any harm to come to the people or markets they serve. It will indeed be hard to adjust down, but every one of them I know understands the need and balance required for everyone’s mutual success. In all honesty, we have all been waiting for the bottom to drop out.
 
Now, ranchers will probably continue to cuss the packers for making all of the money, but then again, the entire beef industry from end-to-end needs to come together.

Lee Wells
Wells Cattle Co.
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Posted

It's kind of a Catch 22. If we hold back our heifers and get cattle numbers back up, as Lee proposes, we generate a bunch more methane ... which leads to global warming. On the other hand, if we don't grow our own cattle, Brazil will be happy to backfill the market --- and their rules/regulations re: hormones, antibiotics etc ... are not nearly as stringent as ours and are routinely violated, anyway. And all of those Brazilian cattle need somewhere to graze. Where do they get the land? By cutting down the rainforest, the lungs of the planet. 

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