Lower beef prices could be on the horizon, with new figures showing ranchers in Nebraska and across the country have continued to rebuild their cattle herds after drought reduced numbers to a 63-year national low in 2014.

"The data confirms what many of us in the industry have known for quite some time here, and that is that we remain in a fairly aggressive expansion mode,” said Jeff Stolle, Nebraska Cattlemen vice president for marketing.

“With what we have seen taking place in our state over the last year or so, I think Nebraska remains well-positioned to be one of the leading beef-producing states in the nation. I don’t see any change with that.”

Nebraska widened its lead over Texas as the nation’s biggest cattle feeder and held onto its second-place rank in total cattle, according to the latest annual count of the nation’s herd, released Friday.

The nation’s total cattle count of 92 million was up 3 percent from last year, and Nebraska similarly posted 3 percent growth in total cattle. There were 6.45 million cattle in the state as of Jan. 1 — more than three per person.

Nebraska’s beef cow count, up 5 percent to 1.85 million, shows that ranchers here have been hanging onto heifers and cows, rather than culling them as they did during drought years. The figure still isn’t as high as the recent high count of 1.94 million in 2007.

Nebraska’s total included 2.5 million cattle on feed as of Jan. 1, down slightly from a year ago but still ahead of its closest contenders, Texas and Kansas.

The state’s advantage in the cattle feeding industry is its location, said Bill Rhea of Rhea Cattle in Arlington, a feedlot with a capacity of about 5,000 heads.

“We have the slaughter capacity, we have the water, and we have the feed,” Rhea said. “We are blessed that way back Omaha was a cattle hub, back in the ’20s and ’30s, and we just kept the slaughter capacity in the Midwest. With the advent of the ethanol byproducts, we have an advantage of feed costs.”

Feeders, who operate on margins, have been challenged lately by prices so volatile “you get traumatized a little bit,” Rhea said. Rabobank analyst Don Close said in a report this month that feeders can expect improved margins this year and next.

Meanwhile, the overall herd growth “bodes well for the consumer,” Rhea said. “She should have better product that’s priced a little bit more in her price range. It might take a little while, but it should mean the meat prices should be softening.”

It takes awhile because cattle don’t mature overnight. Stolle said that by early 2017, “We’re going to start to see an increase in the amount of beef. It is quite likely that moving forward here the consumer will see a fairly noticeable decline in the price of the product at the retail counter.”

Contact the writer: 402-444-1336, barbara.soderlin@owh.com

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