Comment by toomuchtodo
3 days ago
I'm simply observing the trajectories we're on due to climate change, input costs, and the aging out of beef cattle ranchers (in this context, projected beef supply, cost, and downstream consumption patterns from those inputs). We simply have to do nothing as the economics shrinks beef herds over time, pushing prices up. Think consumption death spiral as the the affordability of beef dwindles.
Beef ranchers are uncertain of the future, so they are sending more heads to slaughter, capitalizing on very favorable prices, versus expanding their herds for the future. What does this do to future herd sizes and therefore supply and cost to the consumer? Add the gestational period of cattle to that mental model. When these processing plants close, how long will it take to build new ones or start mothballed ones back up if herd sizes increase years from now? Will you be able to find communities who will accept these plants again? Where will you find the workers?
More US Beef Plants May Close as Cattle Herds Keep Shrinking - https://www.fb.org/market-intel/u-s-cattle-inventory-smalles... - February 5th, 2024
(think in systems)
Since this is a market economy, I assume equilibrium will eventually be reached. Lower supply raises prices, new entrants see an opportunity to make money raising cattle, prices start to come down.
Supply won’t increase for at least half a decade, as my comments communicate.