Practically Ranching
Join Matt Perrier as he visits weekly with interesting, thoughtful, entertaining individuals within the beef community. Conversations will inspire curiosity and creativity while maintaining the independent spirit and practical nature for which ranchers are known.
Practically Ranching
#91 - Ted Schroeder - Presidential Posts, Industry Infrastructure and other Market Makers
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Ted Schroeder is a Distinguished Professor of Ag Economics at Kansas State University. His research on livestock marketing and price analysis provides information and direction for the livestock and grain industries. His research focuses on improving commodity market efficiency by investigating price discovery methods, improving market coordinating mechanisms, and applied risk management. Schroeder also teaches courses in marketing and risk management.
In this episode, we cover the recent Truth Social post announcing the Executive Order to waive quotas for up to 300 Million Metric Tons of beef for grinding in the U.S. We also cover the recent announcements of closures of Tyson beef plants, plus the challenges of today's small cowherd numbers for overall industry infrastructure.
Past episdoe:
https://www.buzzsprout.com/1995747/episodes/13838968
Contact info:
785.532.4488
Well, we are back. As Mark Twain supposedly once said, "The rumor of my demise has been greatly exaggerated." I really didn't intend to take the summer off, but, uh, between an employee's injury, a few more cows on our place, kids stuff, and just life in general, the, the podcast took a backseat. Last Thursday, I was freeze branding a bunch of our fall bulls for this year's sale, and I told myself, "I'm going to get a podcast out in the next week or two, and I gotta find somebody to talk to next week." And then Friday hit, and as I was freeze branding and my phone was blowing up, it was like presidential intervention. I, I knew just what the topic was that I needed to cover. So we're kicking this fall podcast run off with my old college ag economics professor from my days back at Kansas State University, Dr. Ted Schroeder. It's been a few years since Dr. Schroeder has joined me on the, on the podcast, but, um, I always really value that calm demeanor and that, um, level perspective toward what can often be a pretty emotionally charged topic, cattle markets, especially charged when you throw in a little governmental intervention just for good measure. Nobody in cattle country needs an update on what the last few weeks have been like in terms of market news in our beef complex. And given all the, the chatter on social media over the weekend, I thought it was prudent to have a reasonable discussion about just what last Friday's announcement might mean for the greater beef market. Now, before I get any political pushback, I, I don't like to make it a practice of supporting individual political figures due to their party affiliation or anything else, and I absolutely despise governmental intervention, especially into established businesses like the beef complex. So I'm not defending President Trump's announcement last Friday. Heck, by the time this thing airs, he may have rescinded it or made two more announcements about different programs. But I also don't like seeing our industry infrastructure shrink, as was announced I also don't like seeing our industry, industry shrink, as was announced a week earlier than that when Tyson announced further packing plant closures in their processing segment. But I am always looking for teachable moments, and I think that the last few weeks may be exactly that, a time to kinda get introspective and look at our beef supply chain, at supply and demand fundamentals, at imports and exports and producer sentiment and government intervention and everything that can go into making a market. So that's what Ted and I do. We break down the pieces of today's be- beef market. We kinda Monday morning quarterback a few of the recent decisions and try to give a little bit of context to this complicated process of a market at work. Rest assured, as is often the case, everyone won't agree with everything that we say. That's okay. I, I made this podcast to share concepts and to make you think, not to try and convince you that I or any of the guests that I have on here are always right. And while we spend most of the time talking about market prices, I do think that it bears repeating that, in my opinion, it's value, not just price, that keeps customers coming back to buy beef at these price levels. We've got to do all that we can to continue and offer that value throughout the chain, seed stock, calves, fed cattle, carcasses, beef. That value is gonna be what rules the day, and I think that's something that often gets lost in these discussions as we strictly talk about prices. So with that, it is great to be back. By the looks of the statistics on this podcast, we've gained a bunch of listeners while I went radio silent. Maybe I should take a hint. Uh, but welcome to you new folks, and thanks for reaching back into the archives and listening to the, those past episodes while you waited for me to get back in the saddle here. And, and to you listeners who have been blowing up my phone asking what the deal is and when I'm finally gonna make another one of these, thanks for staying with me, thanks for keeping in touch, and it's great to have you back. I hope all is well with each of you, and I hope you enjoy this conversation with Dr. Ted Schroeder
matt_3_08-24-2026_100232time gets away from me, but it's been almost three years since you were a guest here on Practically Ranching. And, I'm embarrassed to say, and I'll probably will have already covered this in the intro, but I haven't recorded one of these in, like, three or four months. I've already told the listeners the reasons why, but I guarantee it wasn't due to a lack of market information this summer that, uh, would've made it an interesting discussion. Feels like every Friday we hear something that sends the beef business into a tailspin.
ted-schroeder_3_08-24-2026_100231In- indeed, Matt. It's, it's a pleasure to join you and, and yeah, we could, we could do a weekly, though neither one of us wants to
matt_3_08-24-2026_100232For sure. For sure.
ted-schroeder_3_08-24-2026_100231and have a different story every
matt_3_08-24-2026_100232Yeah.
ted-schroeder_3_08-24-2026_100231would take at least an hour
matt_3_08-24-2026_100232Yeah. Yeah, no doubt about it. And we can talk about what happened each week, and then we can talk about how all of our industry responded, and that might make an even more entertaining podcast. That does remind me, as I called you last Friday and asked if you wanted to do this, you disclosed something to me that I think you have to tell everybody else in full disclosure, and that is the main reason, in my opinion, why you are able to look at these issues a little differently than maybe I can, and that is you don't do social media, correct?
ted-schroeder_3_08-24-2026_100231I, I do not do social media, Matt. I, I try to stay in, in my lane, which is analyzing data, reviewing information, and then trying to synthesize it as an economist. And I, I just don't have the time, energy, and it's probably the old man syndrome, but I, I just, I just don't, uh, spend time on that, on that platform. And kudos to those that do. I, I'm just... I don't have enough time, I guess, or, or energy to do it.
matt_3_08-24-2026_100232Well, it's probably a good thing because, um, as I can attest, I will read something, think I have made my mind up as to what happens next or my opinions or my perspective, and then I'll make the mistake of going to social media. And, I hope that I don't usually change my opinion, but sometimes it makes it harder for me to separate emotions from intellect, if you will. And
ted-schroeder_3_08-24-2026_100231you know, I mean, it's the world we're in, and it, it is fascinating that, you know, as humans, and I'm not an expert in this field, but we, we react a little bit at times with emotion to, to new things, as opposed to a more calculated, uh, assessment of, of what it really means. And I th- I think that's just natural. And so it's so easy to go out and start typing away or, you know, s- saying something, distributing things on social media that, that while, while they're not necessarily, uh, y- know, well-vetted, they, they sound like, like they're important and influential, and this is the way it's going. And it's a lot of times based more on initial reactions. I need to sit back a lot of times and think things through, and that's not the world of social media. It's very instantaneous. And, and it just takes me a little more time, I think, to and analyze and synthesize. So that's, that's partly That's not the only reason I stay off of it, but, but, but it is the world, and it's the world we see with consumers. It's the world we see with business folks and, and industry participants. So, so I understand it. Uh, but, but yeah
matt_3_08-24-2026_100232Since you've had 72 hours now since President Trump's announcement on Truth Social to kinda digest that, I'm going to reread for you and for me and the listeners, because I read it once or twice and ever since then have just been hearing or seeing people's assertion of what it was he said. But here was his Truth Social post again last Friday. "Today, I concluded a deal to substantially lower the price of ground beef for working American families. As everyone knows, under President Biden, beef prices soared at their fastest rate and the American beef herd fell to its smallest size in modern history. As we work to rebuild this herd and help our ranchers, for the next 90 days, the United States will allow up to 300,000 metric tons of products for ground beef to be imported with no out of quota tariff. We have a commitment that this beef will be sold at 25% below current market prices. This deal will reduce prices for Americans while giving space for our great American beef herd to grow again. Thank you for your attention to this matter. President Donald J. Trump." I'll always love that closing.
ted-schroeder_3_08-24-2026_100231Indeed.
matt_3_08-24-2026_100232So, so there, there are the, quote unquote, "facts," if you will. That- that's the Truth Social post that came from the Oval Office. now, as an economist, what can you tell me as you look at what you know in terms of quotas and imports and tariffs and all these things that the market is already rationing how they will come in and, and how this may affect those?
ted-schroeder_3_08-24-2026_100231Yeah, very good. I, I can't unravel that, uh, th-that President Trump. There's, there's a lot going on there, and it'd take us quite a while. But let-- You know, I, I kinda break it down and, and the first part of this is obviously, you know, what, the magnitude of this volume of imports of, of what's, what's really gonna be probably trimmings? I mean, it, it's gonna be product that most likely is going into grind for sure. and, you know, is 300,000 metric tons a, a massive amount? Is it going to do something dramatic or, or is it a moderate amount? And, and a lot of that depends on sort of, uh, how, you know, who, how, and, and where, because we know the when. The when is the next 90 days, I guess, whenever that clicker starts clicking. But, you know, one of the interesting things about the US is, is we have import quotas, as you mentioned, that are negotiated across individual countries. because of the fact that we have, uh, you know, as I'm, I'm sure everyone in this podcast knows, a, a tight domestic supply, have, uh, uh, trimmings supplies. And, you know, we're, we're at levels... Uh, most of the trimming we're talking about here in the US market be the 90% lean and up, is mostly cull cows. That's where the majority of that supply comes from domestically So, uh, what we're talking about here is product that would substitute for or that would add to the pile or the bucket of that type of beef. And many of our largest suppliers, external particular, uh, you know, the, the Australias and, and New Zealands and so forth of the world, they're pretty close to quota levels, meaning that they have sent us or we have already bought from them probably three quarters of, of their quota amounts. And what, we've got five months of the year left, whatever it is. Uh, so they're near quota levels. So it could be that we relax some of their quotas and let them continue to import into the US at levels that they were going to anyway. Uh, or, or, or a lot of it could be that. If that were the case, if we were simply extending and letting them send more, we're, we're really not displacing that much of our domestic production with this import. Alternatively, other sides to this. Uh, not getting into the weeds too much, but Brazil, for example, uh, we know a very large beef producer could be a major supplier in this space, but their quota was exhausted in January. So anything that's been coming in from Brazil has been under tariff anyway. If some of this agreement is with Brazil, it could be more of a net, you know, addition, if you will, as opposed to what we were going to import anyway. so some of this does matter with who, who we're extending these opportunities to, specific countries, because I don't think it-- what I'm understanding, it doesn't sound like it's a blanket across all, countries, but, but regardless, that, that's part of this, is that it, it could, increase these imports from a modest amount to, to a little bit, you know, to the $300 1,000 metric tons being, being a, a, a large amount of that being new. Okay. Now going back to the cull cow thing that I started with here, we, we are at very low cow slaughter levels. Um, back-- You have to go all the way back to 2015 to see levels comparable to where we're at now in terms of low cull cow numbers. and as you recall, that was a low point in the cattle cycle. We had liquidated the herd. It's natural that we have, when we have a, a, a reduced breeding herd domestically, that we have low cull cow slaughter, which we have now. So, you know, it-it's, it's kind of a combination of things. Low domestic supply, high domestic prices, and now, you know, a, a, a federal government announcement to, uh, to open up or, or if you will, at a discount what it would've otherwise been imports of that lean trim. So I've talked for a while there. Hopefully it, it makes sense on kind of what we're doing there. And, and the magnitude is gonna depend mostly on, you know, whether it's, uh, like I say, new 300,000 or whether it's a, a fulfillment of some that was coming in anyway. My guess is it's probably some of both. I don't think it's the whole 300. I don't know the percentage that will be brand new, but my guess is a good share of it will be beef that was already probably destined to, to come our way
matt_3_08-24-2026_100232So let's, let's play devil's advocate and say that all 300,000 metric tons are new, and that's new '90s lean trim that will be mixed with our '50s to make 70/30 or whatever the percent breakdown of, of grind or ground beef would be. Even at that, how much overall do you see that level of, of lean trim affecting our whole beef market and therefore live fed cattle prices and things like that? Is, is there a way-- I, I know you can do that math, maybe not in your head, but I'm just thinking worst case scenario. A- and we have to add in, right, that this probably increases demand for 50s for that fat that we're making on these 1,700-pound live weight steer carcasses. So there is a little bit of advantage, I guess, to the supply chain today if we have more lean grind and we can sell more grain, ground beef and use those trim. But how do you see that if it was all brand-new stuff that wouldn't have been here anyway?
ted-schroeder_3_08-24-2026_100231Yeah. It's, it's sort of the, for the producer, worst case scenario
matt_3_08-24-2026_100232Exactly. Yep
ted-schroeder_3_08-24-2026_100231brand new and it was not going to come here but for the, the reduction in, tariff or, or elimination of tariff. Well, uh, again, the, this, this is coming into the 90% bucket, which is the cull cow segment. Where, where we would see price movement is first in the wholesale 90 trimmings segment. And, you know, it, it would, would matter. It's, it's gonna move that market if it's all brand new brought in, in that sector. therefore, it would probably be seen also a little bit in cull cow values, but probably not a lot. The important thing to remember here domestic imported lean excuse me, domestic produced lean trim and, and imported lean trim are not perfect substitutes. In particular, domestic trim is nearly all fresh.
matt_3_08-24-2026_100232True
ted-schroeder_3_08-24-2026_100231trim is nearly all frozen. There's a big difference between how processors utilize those products in their, in their production system. So aren't the same product. They're, they're related, they're similar and, and have similar uses, but much different product form. and, and so that matters, too. But there's where you'd see the impact is in the lean 90% plus wholesale prices. It would feed over some, a little bit to cull cows. It would not impact fed cattle markets, live fed cattle prices, s- uh, carcass prices, other wholesale beef prices very much at all. It's not gonna move the needle much there. That's not where the immediate impact would, would be realized.
matt_3_08-24-2026_100232Is it safe to say that if we could make more grind, and this is obviously an optimistic viewpoint from a beef production segment, if we could make more grind at even money or let's say 25% below current market prices as President Trump promised, uh, I'm not sure how he would get that done either, and you can flesh that out later. But that doesn't displace the current beef those consumers are buying. That displaces pork and poultry, right? I mean, that's our head-to-head competitor with lower valued hamburger at the retail counter and at the fast food restaurant. Hopefully we could actually capture some more, uh, not demand, but consumption back from some of those competing proteins. Is that a fair assessment?
ted-schroeder_3_08-24-2026_100231Oh, it, it's likely that if you're bringing in a, a product that is lower priced, that some of that price, uh, w- would end up in service or retail counter ground beef markets. Ground beef mostly, as you mentioned, with chicken products. It doesn't-- I mean, it sounds kind of, uh, unreal, but it doesn't really compete even that strongly with a high-quality steak market. Those are different segmented markets, and, and we've got a lot of, uh, a lot of research that shows that. But is, yes, and, and your, your comment earlier about, well, it provides additional use for our, our 50% or whatever trimmings to be blended. Uh, all, all this product that's coming in pr- predominantly is blended, right? It's, it's, it's gonna be blended into a, i- with our domestic higher fat content fed cattle slaughter trimmings and, and those trimmings really don't have much use in our market unless they are blended with, with that cow meat or this imported meat. So yeah, you're right. It, it, could reduce ground beef prices or hamburger prices to food service by a little bit. I don't think it's gonna be any amount that anybody notices. And again, that's in what we call the worst case scenario, right? That's, that's if it's all newfound. Uh, I don't expect it to be. I expect it to be a mixture, in which case will move the lean trimmings wholesale domestic price a little bit, but not a lot. And, and 90 days it's, it's not a complete change in our, in our supply story.
matt_3_08-24-2026_100232So switching gears a little bit, and, and I guess we're almost going in reverse chronological order, and, and why are we even here? Why are, why is the President of the United States for, I guess I would say the second time in my lifetime, I'm 50-something, and, and I do remember some of the leftover policies, um, from Ford, Nixon, but also Jimmy Carter and the, the dairy buyout and all of these price freezes and all these things, but I don't, I don't remember them well enough to speak very eloquently about them. Um, but it's the first time that I've heard a president concerned about the fact that too many people want our product, and they are... Demand is pushing that, coupled with the low cow herd numbers. But primarily, my opinion, demand is pushing the price of beef so high that we have to do something about it. I mean, it does not feel like that long ago when I was sitting in your class at Kansas State University in the mid-'90s, and we were seeing articles in the beef industry press about X years to meltdown because we could not compete with, from a cost standpoint, pork and poultry, and yet consumers preferred them because they were more consistent, because they were, quote-unquote, "more tender," if you can believe it, all these different things. And now here we are a mere 30 years later saying, "We gotta do something about this beef because we can't make enough of it. People are buying it off the shelves, and this is a problem." So how-- I guess my question, I took a long way to get there, but how did we get at this, quote-unquote, "disaster" of $7 a pound ground beef, $13 a pound steaks, you know, all these different things that the consumers, or at least people are telling us that the consumers are concerned about?
ted-schroeder_3_08-24-2026_100231So, you know, we've heard the story numerous times and, and the data so strongly backs it up, Matt. two things. one, a reduction in the cow herd size that led to a tight domestic supply of beef. Now, that's a long run story that, uh, that has, has happened before. But when it happened this time, we had growing beef demand, and it continued to grow even through the liquidation. Now, that's a wonderful thing if you're in the industry and you're trying to make a living, producing this great product for, for the US consumer. That's something you actually want to have occur, is to have that growing beef demand. I can't remember either, going back to your sort of 30-year story there, a time that a federal government and especially a president of the United States worried about demand growth domestically being a problem, for domestic consumers. uh, that occurred, that growth in beef demand occurred because the industry Going back to probably the early 2000, started taking very proactive action on producing high-quality beef products that consumers wanted. In other words, getting away from a commodity mindset and moving very rapidly to a product value-based market system that s- you know, started or ended, whatever way you wanna talk about, at, at the, the grid pricing of fed cattle to feedlot, and that signal getting sent back to, to you guys in the cow-calf sector and the, and the breeding stock and, and genetic sectors. and what looked like a very much better coordinated vertical supply chain. That's, that, that's what we strove to do for years and years in the industry, and, and the industry figured it out. What a, what a wonderful thing. It's brought incredible prosperity and opportunities for players throughout the sector, from cow-calf through, through feedlots, through processing and retailers as food service as well. It's been a win-win-win-win, I say. And, uh, so you couple those together, y- you shrink supply at the same time demand's growing, and demand's growing for the right reasons. It's growing because of the product offering that the industry's, uh, providing. So, you know, that, that's something I think that we wanna continue to strive to have is, is strong demand and when the industry domestically starts to rebuild again and, and inventories go back up. We definitely wanna keep an eye on keeping demand robust and strong because it will continue to pay, dividends for those involved if we, if we can maintain that. I-- You know, and that, that brings another story to, or part to this, is if we start importing in some way more, however we do it, if we-- If quotas is one thing, if we start doing other things, we, we gotta make sure we don't, uh, you know, bring in product that, that would harm domestic demand. Um, that's something I, I, I'm always sensitive to because it took a long time to get here, uh, and the industry's now chugging pretty well on that s- part of, of producing what consumers want. Uh, let's keep the momentum
matt_5_08-24-2026_103316well, that's, that's the tough thing as we talk about these types of interventions, uh, outside market forces, especially when they come as a result of what I would have said was a successful mission from the beef industry and from our producers and from our feed yards, and even the packer processors that have continued to find ways to add true value to our beef and beef products. And it has worked so well that now we're being told that it's our fault, um, which is just so ironic, it's almost funny if it wasn't for the fact that we're about to sell hundreds of thousands of calves over the next few months. And, you know, there- we've got a cattle on feed report that just came out. We're at 2% above where we were a year ago at this point because of longer, not more placements necessarily, but longer feeding of cattle. And, and so many things that, um, point to the fact that this is probably not a time to start trying to pick winners and losers and put your thumb on the scales of the beef market
ted-schroeder_5_08-24-2026_103315well, very true, and if, if you kind of think about the, the longer play here, the industry has invested heavily in, branded programs and program-type production systems a- a- and vertical arrangements to make sure we're getting the kinds of cattle that will meet or, you know, perform well in, in a, in a value-based system. Those don't happen accidentally. They happen by concerted effort and long run kinds of strategic And so, you, you wanna, you wanna reward those and, and encourage them and let them happen, and they happen because markets and participants figure out ways to make sure and reward those who are, having impact on, on the quality downstream that's being available to the customer and consumer. So those are, those are things you, you, you wanna encourage, let happen, and the industry figures it out if it cares enough to do it, and that's what the beef industry story has been. So yeah, it, it, it, I, I think any kind of in and modifying market situations can, can at best detour, hopefully, hopefully not worst case scenario, derail those kinds of efforts. Um, we've seen some, and we can go down the list, but, you know, uh, even, you know, not to get into too much history, but even things like a renewable fuel standard, which, you know, looks like it should be, not on surface relevant to the cattle industry,
matt_5_08-24-2026_103316Oh.
ted-schroeder_5_08-24-2026_103315it, it was a catalyst to continuing a liquidation of the herd. So, you know, there's all kinds of different things like that. It, it doesn't have to be just an import policy. It can be a domestic policy that has significant influence on our markets, whether it's an input cost or whether it's, a, a value of what we're producing. Uh, if, if a program goes in and modifies that, back to your comment about there's winners and there's losers and, and you wanna make sure that, uh, an industry that's thriving like this one from a demand perspective, you don't that. I don't even like a detour
matt_5_08-24-2026_103316Yeah. N- neither do I. Neither do I. You know, you said something there as we talked about growing demand and coming through a liquidation phase of the cattle cycle, and some would say we n- you know, some would even say the cattle cycle no longer exists. I, I think it's different today, thanks to a lot of factors, value-based marketing probably being one of them. But, let's talk through I, I-- before last Friday's, announcement, but after the Friday prior when Tyson announced that they were closing Joslin, Illinois plant and selling Pasco and all, you know, several other changes in their s- industry structure or business structure. I wrote an article for our newsletter, which if I can get it done, will be out here in a couple of weeks for our customers. But I titled this article, "It's Not You, It's Me," almost like this excuse for a breakup and, and all of these different deals of, of cow-calf producers. Uh, we, we love to place blame on why a market works a certain way that it does, and that blame gets put on any number of folks, um, corporate feed yards, packers, the president of the United States now, who so many of us re- supported and are now, uh, blaming for this. But is not the blame, if you can say it that way, on us as cow-calf producers for not expanding our cow herds every time that the market... Now granted, drought and some things like that are telling us to throttle back, but I've never seen a time when we didn't respond to high prices and keep probably too many heifers, and yet here we are, and we're in that situation. What, what's the reasoning from your standpoint? I'll share mine, or actually my wife Amy's reason, which is a lot different than most people's probably. But what, what do you see from a, from a economist's viewpoint as to why we continue to refuse in any large scale form to grow this cow herd?
ted-schroeder_5_08-24-2026_103315Well, I look forward to hearing your and, and your wife's, uh, y- know, explanation. I- from my chair, I look at it, I say it's a complicated set of several factors. It's not a single thing in my mind, uh, you know, when, when an industry expands, especially one like this with so many different players, 700,000 some cow-calf operations, many still small in the US, you know, it takes several, it takes a lot of them to, to be making the same decision to expand. And what creates those expansion opportunities? Well, the first one is a high selling price for calves. Absolutely. That, like, incentivizes and makes one say, "Hey, this looks really, really promising." But let's go first. We had such an increase in prices here that the opportunity cost of retention is high. What do I mean by that? That to retain heifers right now, when you're looking at record values for those heifers being sold instead the feeder cattle market and on down this, the chain, that's a huge investment. So y- you know, the just, just the flat out, y- you can say, "Well, yeah, it's a catch 22. You, you save them and you're eventually gonna get that revenue, even double it down," whatever. But it's, it's, it's a hard, long road to double down. Uh, so that's one thing. We know we still have drought situations that are quite acute in several places where much of our herd, cow herd exists. It's not everywhere, but it, it's there. know that in places where drought isn't a problem, you know, and, and you can look some parts of the Midwest, say Missouri, one of our large cow-calf states, are you gonna expand there? You're gonna have to displace Land being used for something else that has been diverted away from cow-calf production for economic reasons, right? So have to almost go back and, back in land that previously was being used and now has gone on to other uses. So it's a reintroduction kind of thing. That's tough, even if they're not in a drought situation. It's a very costly thing to do. Land prices have continued to escalate, so the re-expansion you know, is, in, in those areas is just, is just, again, very costly. Uh, you know, finally, and it's, and it's one we hear a lot about, but I, I think it's real, we, we have an aging cow-calf producer, uh, And, and when you're aging, as someone who's entering that arena very quickly here, I guess I'm already there according to most, since I'm asked daily when I'm gonna retire. But you, you pull back in the reins a little bit because you don't need to be aggressive in expanding. You've built your, you know, you've built your enterprise, you've built your, your system, and why not let it ride for a little bit? You don't need to go out and take on those new costs and expenses and risks. so, you know, I think it's a combination of many of those things, Matt. I don't know if any of them is the most important. I think in different segments of the country, are more dominant. You know, drought gonna be more dominant in the, in the, in the western part of the US, uh, and, and, you know, down in parts of Texas. Oklahoma, obviously. You know, the land price squeeze is probably everywhere. Um, and, and the aging producer, it's, it's, it's still there. So th- those are some of mine. I, you know, I think, but I, I, I'd much rather hear your, your creative, uh, thoughts on this and, and, and where you guys are seeing.
matt_5_08-24-2026_103316Well, this one takes into account all that you just mentioned, and they're all a piece of it. And then maybe this is just that straw that broke the camel's back type of theory. But first I have to, I have to go back, to a conversation with a friend of mine, customer, bull customer, um, y- several years ago, pretty sizable cow herd, but also a yearling custom grazing situation, um, as part of their business on the side. And, you know, this would've been, I don't have the exact year, but probably coming out of the post-COVID ups and downs and, and, uncertainties that prices and everything, brought on there. And he said, "You know, I can, I can make more money off these 90-day custom yearling cattle than I can off of a cow. A cow's just too expensive to c- to have around." And there were times when that was definitely the case for a couple years. And I said, "Yeah, but what about in four or five years? Because you're not the only one who's saying that." But he sold through that market, those, all those heifers, didn't retain any. And, and, uh, it was evident that there was, it was a, uh, a decision that their family had made to move into more grazing type cattle than cows. And I'd ask him about it again and, and again and again, and there'd always be an additional excuse. And finally he said, "You know, my kid is... He was involved in a sport and he said, "I wanna be able to go and watch him perform." And I didn't think anything about it. I'm like, "Well, good for him. You know, family first. That's great." I talked to another, this one in the same region of the state. Similar situation. He'd been custom operating some cows for someone else, and he decided that I'm just gonna do short season yearlings and not have these cows through the winter, early spring. And I said, "You got a little lighter load." This was during basketball season. "Have you got a little lighter load?" "Oh man, so much so. Yeah. I'm just so glad to not have those. And, you know, I can watch my kids go play basketball and I can go... You know, sometimes I just wanna run down and see, see my son in Texas and, and all these different things." And I had three or four different discussions just like that. And one day, Amy, as I was banging my head against the wall trying to figure out why, I mean, are we, are we gonna have any cow-calf producers left in this industry? And, um, she said, "Well, you figured the answer out." And I said, "What is it?" And she said, "It's the involvement of fathers with their family. It's this expectation that every other dad is taking a week or two weeks off work to go to the Summer League Basketball Tournament in Louisville or going to every single ball game every single night, three sports, sometimes with a club team overlapping, and taking their kids to every rodeo, every steer show, every weekend. Y- you can't do what dads do today, and this is sounding very sexist and, and our family is not, I hope, but same way with, with moms that are running cows. You can't be as involved of a parent as what society has told us that we have to be today with 12 month out of the year sports and instead of a 4-H project with one or two shows, a jackpot every weekend. It, it's tough to keep up with the Joneses in, in parenting today and run 200 to 500 or 1,000 head of cows. And I'm like, "Holy smokes." We've tried to take all of the market signals and the costs and everything else, and here Amy says, "It's just, it's a human element of where the priorities lie." I, I don't know if she's right or not, and maybe it's just an excuse, but it does connect some of those dots as to why, um, we are seeing folks not get out of agriculture, 'cause a lot of them aren't. They're just finding a segment of agriculture they can do and have a little bit of wiggle room that, you know, we used to say dairies didn't... Well, guess what? We have no more dairies. We have no more family dairies, I'm sorry. They've all moved into some type of corporate structure where we can all share in those duties, and we don't have to be there to milk and feed twice a day every day for 52 weeks of the year. I hope we're not, but my question to you is, if Amy's right, are we moving to a huge consolidation of cows in the next 10 to 20 years because of the risks associated and because of the labor or lack thereof, to where you have to be big enough that you have hired employees to share the responsibilities?
ted-schroeder_5_08-24-2026_103315Mm. a lot in that, Matt. I, I-- The first thing I kind of was thinking it, it, it harkened me back, and your young viewers aren't gonna know what I'm talking about, but the rest of them probably will. But I'll-- To Paul Harvey's, you know, tribute to a farmer, and it, it, it was exactly true. It, it is still today that they are wearing an incredible number of hats, and certainly responsibilities and desire not to miss out on family things is, I think a, a larger-- of, of larger importance to today's generation. And, um, I, I applaud it. I mean, it's a wonderful thing, right? You, you, you definitely find that as, as, uh, as, as a virtue I'm still seeing some amazing producers who are able to juggle all that, right? And you know that. We see that. I don't know how they do it, but, but they figure out ways and it's, and, and it's however they're setting up their production system to, to be, you know, to not need them there at every moment, at every day, and, and you still gotta deal with emergencies, I get it. But, but anyway, the point is I, I'm still seeing some that they're able to do that. I'm not saying those that aren't are, are somehow, you know, n- not, not performing their duty and, and, and set up well. But some of that's just technology, right? For sure.
matt_5_08-24-2026_103316Sure
ted-schroeder_5_08-24-2026_103315you figure out ways to monitor things where you don't have to be there constantly. Some of it is having additional labor, like you mentioned, that, that, you know, you, you have that you can rely on and that are, that are subbing back and forth when you can and can't. Um, I think structure of the industry changes for many reasons. That may be one of them, but I think there's probably other things that drive that more strongly, you know, things that have to do with economies of scale and ability to manage more resources and, and frankly, at the end of the day, uh, have a smaller margin but be able to make it up with volume. And you can-- You know, there's a whole lot of whole dialogue just on that alone. But I, I don't doubt that we're gonna continue to consolidate some. We're still gonna have a lot of hobby around, but I think we'll consolidate some, and I think it's gonna be partially driven by you said partially driven by, uh, economies of scale in general. what that means for the whole herd, I'm not sure. You know, the dairy industry, y- you know, somewhat you can look back and say th- they went through this quite a while ago. I grew up on a hog farrow-to-finish farm, uh, you know, in, in addition to some other things. They don't-- What we did doesn't exist anymore
matt_5_08-24-2026_103316right
ted-schroeder_5_08-24-2026_103315Thankfully so. While I think, uh, I, I learned a har- a lot of hard knocks through it, uh, I'm sure glad I'm not still doing it. Uh, know, but, but th- those things change and, and lifestyles change with them. I think, I, I think when I see lifestyles change, I see them change because what we're doing enabled us to be able to do that. And I, I-- You know, uh, my dad, your dad, they, they worked and you yourself even, worked continuously very, very hard because that's what they had to do to make a living, right, on the farm and on the ranch I'm not saying we don't have to work as hard today, but you know what? I,
matt_5_08-24-2026_103316don't
ted-schroeder_5_08-24-2026_103315still farm a little bit and I see the farmers in my neighborhood and, and I don't want them to get mad at me, but they don't work as many hours as we
matt_5_08-24-2026_103316No doubt
ted-schroeder_5_08-24-2026_103315don't. They don't have to. Their technologies have enabled them to make their kids' basketball and baseball and football games, right? And, and, and, and, and band performances, let's, whatever it
matt_5_08-24-2026_103316you name it. Activities, yeah
ted-schroeder_5_08-24-2026_103315Yeah. And, and I wasn't, you know, cheated out of my parents not always being there. It was fine. I recognized it. It was part of the way we were and it's part of the business we ran. I, again, so I'm not-- I don't know the cause and effect here. I, I think to some extent that, that you set up your operation with the, that are there and the, and the, and the ways you can do that. know that cow-calf production is intensively seasonal labor, right? It's... And, and so, you know, how do you, how do you manage that? Y- you know, and, and during sometimes you just gotta be on call. You gotta be there 'cause, 'cause it's your whole year's production on the line. Uh, heifers calving, you know this better than I do. Uh, but, but anyway, so, so I think it's some of both. I mean, obviously it's some of our desire to be there and not miss out on a part of life that our parents probably missed. I, I always feel bad about that, that they missed that 'cause I think they're the ones that missed it. I, you know, I could, could handle them not being there, but I think they missed out. I was fortunate I've had a job where I could, you know, manage and, and make more of those things, when my kids were growing up. But, uh, yeah, and, and now, Matt, many of them are grandpas,
matt_5_08-24-2026_103316Yeah
ted-schroeder_5_08-24-2026_103315a farm dad anymore. And you know what? I, I'm not a grandpa yet. I don't know, I may be someday. Who knows? Not on my decision. But, uh, man, I think if I am, it's really on me if I miss things there.
matt_5_08-24-2026_103316Yep.
ted-schroeder_5_08-24-2026_103315my last chance
matt_5_08-24-2026_103316Yep
ted-schroeder_5_08-24-2026_103315celebrate family, uh, activities. So, so I, I think it's interesting human of, you know, value system that you're describing and, and I do think there's some, some truth in that
matt_5_08-24-2026_103316Yeah. Well, wh- whatever the reason or, or let's be honest, reasons, because it's always plural. There, there are a numerous amount of factors that, that go into these decisions. But, it'll be interesting in the next year to two years. I th- I, I felt like there were some hints of heifer retention, especially in areas that have the forage and the, the rainfall and moisture to, to make that a little more sensible decision than those that are still trying to figure out how they get what they have through to the next year. But it'll be interesting to see if markets respond negatively to the news that we've had the last few weeks. And we- you and I haven't even talked much about plant closures and, and shrinking of our, our processing segment. But if, if the market, if we do, because of all these things, move lower and heifer calves specifically are worth less, does that not cause some of these folks to say, "Well, that opportunity cost that you just mentioned is not as high as it was, especially in May or June. Um, maybe this is time to keep her," and maybe it does exactly what President Trump said, even though at first glance I said, "Why would, why would imported beef and more uncertainty in our markets cause heifer retention?" Once again, he may accidentally be right. I don't know. A- and I hate to even laugh about that, but I've, I've missed what I would've said would've been cues from a market standpoint over the last five years. I've missed each time and said, "We still aren't doing what I thought that these prices would tell us to do in terms of cow herd expansion."
ted-schroeder_5_08-24-2026_103315Well, and you bring up a, you know, another just broad context that I think speaks to many of these is uncertainty. Th- this is a, this is a long run investment. You don't just say back a heifer and, you know, suddenly have more calves hitting the ground and then, you know, you can manipulate that up or down easily. This is not opening or closing a, a water spigot, right? It's a, a long run, multi-year sort of decision at, at least for the industry. An individual, sure, you can sell bred heifers to somebody else if you don't want them. But, but, you know, the industry as a whole, it's a long run, you know, strategic decision to, to start changing what we're doing, expanding just much like we do when we contract. is usually out of opportunity, but opportunity is clouded or muddied water if there's a lot of uncertainty, right? See, the opportunity might look like it's there, but you're uncertain how, how reliable that opportunity is. Is it, is it truly, uh, one that I can attain if I start retaining and in two years will it still be the same? I think we, in general, have a, a, a set of markets and information hitting and slamming us that that uncertainty's pretty high. Um, and it's not just, you know, at the margin, it's uncertainty on a, on a really sizable way. Uh, we had-- what energy prices have done in the last two years. those are, those are game changers for s- for an energy intensive segment. Um, you talk about the plant closures. Yeah. No, yeah, th- th- those are long run things. You mothball a plant, it is really difficult to, to relaunch it and, and rarely do they. So point is, we, we've got a lot of uncertainty that I think that creates trepidation, uh, in, in investment. And I think, you know, there's a lot of places where that's, where that's occurring. Um, you know, we've, we've got some feedlot expansion going on
matt_5_08-24-2026_103316Yeah
ted-schroeder_5_08-24-2026_103315we'll see what, what that does. That creates market opportunities for, for feeder cattle. Maybe that starts to get a little more, uh, l- little few of the clouds and, and mud out of the water. Maybe, you know, you start to see a pathway. But, um, I, I think some of it's that as well. And,, it's, uh, uh, tho- those are decisions one has to make. You know, life has been pretty good the last couple of years. Why, why, why turn the thing upside down too? That's, that's some of the individual story
matt_5_08-24-2026_103316Yeah. We don't have a lot of time here 'cause I said I would try to keep you under an hour, but, um, let's talk just a bit on the announcement two weeks ago by Tyson to close that plant in, in Joslin, um, sell the Pasco plant, another plant in Utah. You know, that's on the heels of what? Six or eight months ago of them closing the plant in Lexington, Nebraska, That's somewhere around, I think, if rough math and memory serve me right, 30% of their kill capacity-ish, if you tally all that up. Um, number one packer in the US. There have been cries for breaking up the packer, and they've got... We're, we're selling too many cattle through three or four, um, companies. That threw 30% of their, I, again, rough math, capacity out onto the open market if somebody else wants to grab it and turn it into regional plants. Um, some of the same folks that were asking for that are now absolutely losing their minds over the fact that they've increased their leverage with these moves. All this noise, all these discussions, all these what-ifs and whys and how could theys, I'm sitting here from my place in the southern Flint Hills of Kansas going, "Are we turning into the lamb industry? Are, are, are we shrinking this business?" Whether we're talking about lack of cow herd expansion, shrinking infrastructure, at least on the processing side, more consolidation at the retail side, all these different things. Are, are we, are we squeezing this industry down to a size where we lose that critical mass? And even though we have immense demand for our product, are we gonna get so small that we can't effectively operate And how do we stop that? I know we can't and we shouldn't and we don't want to go in there and, and put requirements of, you know, force people to keep heifers and all these different things. But at what point do we get so small that we're no longer relevant?
ted-schroeder_5_08-24-2026_103315Well, it's crystal ball stuff that's pretty
matt_5_08-24-2026_103316Sure
ted-schroeder_5_08-24-2026_103315to, you know, completely see. But, uh, I, I think it comes down to, to longer term alternative uses of, of capital and, and costs of, of maintaining where you're at relative to what you could do otherwise. I, you know, and when, when demand is as strong as it is, boy, the, the, the opportunity is still there. I- it hasn't gone away. The, the lamb industry, I mean, you know, I, I don't wanna, like, get too comparative and, and, and judgment there, but, you know, they, they kind of lost demand and, and domestically, a lot of things happened that, you know, that, that sent it astray. Uh, and, and w- we're not there. We're, we're not heading in that path, I don't think. But your, your point is well made that what time does beef become such a small sector that, you know, it-- some could argue it's a luxury
matt_5_08-24-2026_103316Right.
ted-schroeder_5_08-24-2026_103315and it's not a staple. Fortunately, protein demand in general is still high and, you know, high quality beef is, is still very, very strong. But, I think more about just the infrastructure of, of, what will incentivize or disincentivize cow-calf sector from, building and, and that I, I... Look, 2015 to 2019, grew at such a rapid, rapid rate. I, certainly I didn't anticipate the level. I anticipated the growth, but I didn't anticipate the level of growth. we can turn this thing on a dime if it starts raining. We can turn this thing on a dime if markets become a little more predictable or at least stable, or information isn't slamming us every day that we're trying to interpret and react to. So I, I'm not, like, saying we're, we're in a long-term decay of, of the industry's input value and, and, you know, uh, uh, size. I, I think it's, I think it'll regrow. I just it's, it's, it's a little bit nervous to do it right now
matt_5_08-24-2026_103316We have so much opportunity ahead of us. I mean, a- and I don't want-- I know I've sounded pretty pessimistic here from the supply side of things, but from a demand standpoint, I mean, to see beef fly off the shelves at the prices that it's sold, to see folks lined up at these white tablecloth steakhouses and everything else in between, it's something that I never thought I would see as a kid growing up in the beef industry. And so just absolute incredible opportunity for beef producers who want to stay focused on that consumer and what it is that they're telling us that they want. What we need is, I think, a little help from Mother Nature. Let's see, Father Time, the administration or, or let's just say all elected officials of, again, I'm going to show my leanings, but of letting capitalism work and letting markets work and letting trade work. And, I think we're in a phenomenal position in all segments, honestly. Now, the margin producers, because of the tight supplies of calves, are in the toughest spot. But, you know, the debates we're having right now pale in comparison to the debates that we were having in the mid-90s or the 80s or all these other times when we were trying to shove a product at consumers that they didn't want in the first place ...at any price. And then had this supply glut, whether it be from imports or from retaining too many heifers and having too many fed cattle on the market or whatever the case may be. We can sort through these things when we have a product that people want to buy. And I think we have to remind ourselves that even though I've spent all this last hour talking about, you know, all the downsides of, of, um, tight numbers and, and all these different things. So, yeah, it's, it's a great time. And these are great discussions to have. I don't know. I hope that this may kind of add some perspective to folks because I haven't seen one like this. Although this morning I did check Facebook before we got on here. And there were several folks that kind of had some head scratching, deeper thinking, hey, what if this is not necessarily as bad as we initially thought? And I'm referring specifically to President Trump's announcement last Friday. And so I think cooler heads will prevail. I think the market, like it always does, will help us sort it out. We'll see how many of those traders in Chicago like you stay off social media or how many of them were, were reading it all, uh, all weekend. I noticed, let's see, it looks like at this point, 11 o'clock central time on Monday the 24th, nearby futures are down, live cattle down two and a half bucks and feeder cattle are about even. So I don't know that we're seeing the sky fall necessarily. Um, and I think, you know, when you've got the level of demand that we have right now I'm not sure that we can say that nothing's going to break this market. Um, and maybe we're better off because we s- the market took a breather and didn't get to, as some people were talking about, $2.75 fed cattle or $3 fed cattle. I mean, what would that have done to, um, to the market? I'd rather take a little bit of a breather and extend the good times we've had for another year or two years and grow into this thing at a more methodic pace than having this blow-off top that we were probably on our way to in mid-June,
ted-schroeder_5_08-24-2026_103315Well, you, you did a very nice synthesis there of, of I think the state of, of where things are. Challenges are, are real and uncertainties here, but the opportunities are, are also as real and, and they're, they're very strong. And those who are willing and able to, to navigate through those and figure out a production system and a market channel that will enhance their opportunities even more make sure that they're there for them, will have profitable opportunities. They will prosper if they do it well. And again, I'm, seeing some of those. I'm amazed by some of those who are, who are able to do that and have expanded already, and have figured out how to do it e- even amidst all of the, and the challenges and, you know, uh, th- they're many, but they always have been for this industry. But the good news is there's some really nice rainbow type stuff there with, with beef demand, and, and let's not forget that. Um, the challenge is if the consumer's not there and not stepping up and not buying our product, now we got a problem.
matt_5_08-24-2026_103316Yep
ted-schroeder_5_08-24-2026_103315Uh, they are, they're there, and so, you know, it's a, it's a question of how, when, and where can I participate in that as a, as a producer? And, and they're there. It j- just you, you gotta make sure that, that your ducks are in line and that you're watching your, system as you go. and, you know, hopefully we, we don't overexpand, but somewhere at a moderate, like you said, you know, make some moderate decisions. Do these as you can. Keep, keep your, your value system in
matt_5_08-24-2026_103316Yep. And we are always guilty of doing that, it seems like. Uh, maybe not the last 10 years, but, um, so often, or last seven. So often, yeah, we- the signals are there, and instead of incrementally growing the cow herd, we do like we did in '15 and, and, um, get a little too full of ourselves. But I think that's one thing everybody still remembers, is that '15, '16 time period, and that may be another factor that we didn't even mention, but is obviously still there in the rearview mirror
ted-schroeder_5_08-24-2026_103315Well, uh, the, the, the, pain was hard and then the COVID thing just slammed. So it, it was kind of a double, right? That there was some, that there was just very rapid expansion and then we had, of course, a, a catastrophic, we, we hope, you know, once in a lifetime kind of thing that, that occurred that was just
matt_5_08-24-2026_103316Right.
ted-schroeder_5_08-24-2026_103315swan bad
matt_5_08-24-2026_103316Yep.
ted-schroeder_5_08-24-2026_103315that
matt_5_08-24-2026_103316Several on top of each other. Yep. Well, Dr. Schroeder, thank you for, um, being on here, for putting that, uh, synopsis together, because I think that does sum it up very well. We've got an industry, and we're very blessed to have an industry today that, uh, has, A, consumer demand, but B, a pretty good market signal mechanism to pass that back to all of us throughout the chain. Is it perfect? No. Do we still need to use everything we know about markets and economics and new technologies to make it even better in the future? Yes. And you and I have had those discussions and we'll continue to have those discussions. But we have a mechanism that rewards the good cattle that make good carcasses, that make consumers willing to come back and pay even more for beef next week than they did last week. And as long as we maintain that, and as long as we continue to make subtle improvements and, and have that opportunity, yeah, there's all kinds of opportunities for people to do exactly that and meet those and be rewarded for it, so. Thanks a bunch, Dr. Schroeder. We always enjoy the conversations, and I know folks will enjoy this one as well. So I'll put your contact info out there. I don't think you'd said anything here that'll get you much hate mail. I'll probably get most of it, but, uh, uh, if it's okay, I'll put your email on there. And if folks do have further questions, is it okay if they reach out to you?
ted-schroeder_5_08-24-2026_103315Absolutely, Matt. We're always here to, to try to help, and I, I am, uh, I'm honored actually, frankly, to, to, to be with you today and, and, and to serve this industry. It's, it's been, you know, a incredible ride and, uh, we're, we're still here, we're still in business, and we're, we're always happy to help and react. You know, and, and I was always told since a very young age of, of my scholarly pursuits that the second best compliment you can get is someone to send you hate mail because it means they're listening, you know? And so, uh, and, and they're, and they're reacting and, and that's, if nothing else, you know, if, if we accomplish that and we make people think a little bit, and whether they agree or disagree isn't as important as that they about things and figure out how that fits with their goals, right? And what they can or can't do. And again, you know, not about this is wrong, that's right. It's about how do I position my operation or my own personal life even into, into ways that I, I think match with what I want to try to accomplish. So this industry's full of incredible innovators. I, I, I... That's what makes it so fun
matt_5_08-24-2026_103316Awesome. Awesome. Well, we appreciate you being the catalyst for that and, um, always look forward to the next conversation.
ted-schroeder_5_08-24-2026_103315Indeed
matt_5_08-24-2026_103316All right. Thanks a bunch.
ted-schroeder_5_08-24-2026_103315All right. Take care,
matt_5_08-24-2026_103316You too
Thanks for joining us for Practically Ranching, brought to you by Dalebanks Angus. We're starting to get ready for our fall sale. We just gathered the fall bull calves off pasture a few weeks ago, and we'll bring the big spring long yearlings off pasture next month. We hope you can join us for the sale. It'll be Saturday, November 21st. We'll sell over 150 bulls, yearling, and coming two-year-olds, plus six elite yearling heifers. It'll be held at the ranch northwest of Eureka, Kansas. If you're interested in a catalog and you aren't already on our list, just email me at mattperrier@dalebanks.com. Thanks again for listening. We'll visit again soon.
