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 Market
dynamics, influenced by global trade policies and domestic demand,
add another layer of complexity to the economic environment.
Consumer preferences are also evolving, with a marked increase in
demand for sustainably produced, high-quality beef. Current
macroeconomic conditions force consumers to make the choice between
not only different cuts of beef but also between beef and other
proteins. As beef cattle producers in Logan County strive to balance
these economic pressures and consumer demands, they demonstrate
resilience and adaptability. This article delves into the current
challenges they face and explores how they are innovating to meet
the demands of a rapidly changing industry.
Before exploring the challenges beef producers face, it is important
to understand the current landscape of beef cattle production in
Logan County. According to the 2022 Census of Agriculture,
approximately 3,400 acres of all the agricultural land in Logan
County were in pasture, roughly nine percent of the county's total
agricultural land. Over $1.455 million worth of cattle and calves
were sold from Logan County in 2022, which accounted for seven
percent of all ag sales from the county.
As of January 2024, the total
number of cattle and calves in Logan County was 2,400, slightly
increasing from the 2,300 head from the 2022 census. Logan County is
also one of the largest alfalfa hay-producing counties in Illinois.
In 2023, the average yield was 4.95 tons/acre, which was higher than
the Illinois average of 3.80 tons/acre. Only Carroll, Christian,
Clinton, Douglas, Jasper, Moultrie, and Warren counties had higher
average yields than Logan County. While Logan County may not be the
largest beef cattle-producing county in Illinois, it is still an
essential part of the County's agricultural and overall economy.
When considering the challenges beef producers face, much of the
focus is on the economy at both the farm and macroeconomic levels.
While much of the discussion is on the financial health of grain
operations across the country, livestock producers face unique
economic challenges. The United States Department of Agriculture
(USDA) estimates that overall cash receipts for cattle and calves in
the U.S. are expected to increase by over $6 billion from 2023 due
to higher market prices for beef. An article from farmdoc daily in
February 2024 projected the market price for beef to be at some of
the highest levels ever. This is primarily driven by a decrease in
the total number of cattle and calves in the country. Another
analysis from farmdoc daily placed the U.S. cattle inventory on July
1 at 94.2 million head, roughly one percent lower than the July 2023
inventory. The larger national herd means fewer cattle go to the
slaughter, thus raising the cattle market price. Larger herds,
however, come with higher costs for producers. The USDA estimated
that increases in labor and feed costs and more money spent on
livestock purchases represent the largest increases in overall farm
expenses.
An increase in herd size and
production costs are not only economic pressures for beef producers.
Macroeconomic conditions are also impacting consumer demand for
beef. It is no secret that inflation and high prices have put
pressure on consumers in recent years. Food is one of the indicators
economists use to measure inflation and its impact on consumers. The
USDA reported that overall food prices increased by almost ten
percent from 2021, the fastest increase since 1979, and all food
categories saw at least a five percent increase. Food prices slowed
in 2023, only increasing by around six percent. Pork was the only
food category that did not see an increase in 2023. So, what does
this mean for beef producers? As the price of food increases and a
consumer’s income remains steady, the consumer will make a choice
about the type of food they purchase at the grocery store. Let’s say
that a consumer usually purchases a ribeye steak when they go to the
store. However, with food prices increasing, the price of that
ribeye also increases. The consumer will look at other,
lower-quality cuts of beef, such as ground beef, to try and save
money. The consumer may also look at proteins other than beef. The
consumer may look to chicken or pork as a cheaper alternative to
beef. Now, let’s recall the laws of supply and demand - an increase
in the price of a good leads to a decrease in the demand for that
good. So, as consumer preferences shift away from beef, then the
price of beef will continue to increase.
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Beef cattle producers in Logan
County and across Illinois face diverse and unique challenges to
their operations. Financial pressures on producers due to rising
costs of feed and labor, combined with macroeconomic pressures on
consumers and other issues, have placed producers in a volatile
situation. However, light is at the end of the tunnel as the economy
rebounds and consumers return to beef. Producers should continue to
look for opportunities to keep connected to consumer demands and
place their operations in a position to thrive for the future. As
always, Illinois Extension is here to help your operations meet
those challenges head-on and be viable for the future.
About Extension:
University of Illinois Extension develops educational programs,
extends knowledge, and builds partnerships to support people,
communities, and their environments as part of the state's
land-grant institution. Extension serves as the leading public
outreach effort for University of Illinois Urbana-Champaign and the
College of Agricultural, Consumer and Environmental Sciences in all
102 Illinois counties through a network of 27 multi-county units and
over 700 staff statewide. Extension’s mission is responsive to eight
strategic priorities—community, economy, environment, food and
agriculture, health, partnerships, technology and discovery, and
workforce excellence — that are served through six program areas —
4-H youth development, agriculture and agribusiness, community and
economic development, family and consumer science, integrated health
disparities, and natural resources, environment, and energy.
References
Franken, J. (2024). How big is the U.S. cattle herd? farmdoc daily
(14):138, Department of Agricultural and Consumer Economics,
University of Illinois at Urbana-Champaign, July 25, 2024.
Franken, J. (2024). Records are made to be broken! farmdoc daily
(14):24, Department of Agricultural and Consumer Economics,
University of Illinois at Urbana-Champaign, February 5, 2024.
United States Department of Agriculture, Economic Research Service.
(2024, September). 2024 Farm Sector Income Forecast.
https://www.ers.usda.gov/topics/farm-
economy/farm-sector-income-finances
/farm-sector-income-forecast/.
United States Department of Agriculture, Economic Research Service.
(2024, August). Summary Findings – Food Price Outlook, 2024 and
2025.
https://www.ers.usda.gov/data-products
/food-price-outlook/summary-findings/.
United States Department of Agriculture, National Agricultural
Statistics Service. (n.d.) 2022 Census of Agriculture County Profile
– Logan County, Illinois.
https://www.nass.usda.gov/Publications
/AgCensus/2022/Online_Resources/
County_Profiles/Illinois/cp17107.pdf.
United States Department of Agriculture, National Agricultural
Statistics Service, Heartland Regional Field Office. (2024, April).
Illinois Alfalfa Hay County Estimates.
https://www.nass.usda.gov/Statistics_by_
State/Illinois/Publications/County_
Estimates/2024/20240426-IL-Alfalfa-
Hay-County-
Estimates.pdf.
United States Department of Agriculture, National Agricultural
Statistics Service, Heartland Regional Field Office. (2024, May).
Illinois Cattle County Estimates.
https://www.nass.usda.gov/Statistics_by_
State/Illinois/Publications/County_
Estimates/2024/20240513-IL-Cattle-County-Estimates.pdf.
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