10 minute read
Driving Illinois Growth
Expansion and Building Signal Future Beef Industry Health
By Joli A. Hohenstein
As the beef industry navigates complex market dynamics and evolving consumer demand, the state of Illinois is emerging as a hub of innovation and adaptation for commercial livestock producers. Insights from key players shed light on the challenges and opportunities shaping the future of cattle production in the state.
The Illinois beef industry stands at a crossroads of opportunity and challenge, with producers facing possibilities for expansion while managing economic considerations. With it comes a concerted effort toward improving sustainability, all the while enhancing feed efficiency and exploring innovative initiatives.
Beef industry economists with CattleFax continue to project record-breaking cattle and beef prices throughout 2024, on the heels of 2023’s record-high averages for fed cattle and calves. Their positive outlook shows improving margins for cow-calf producers, with lower numbers creating a tight supply of feed cattle in beef production continuing over the next few years.
Meanwhile in Illinois, we’re also enjoying higher prices along with steady inventory numbers compared to other states, and our cattle barn construction rates are reflecting that positivity. So, what’s driving industry development in Illinois, and what can we expect for continued building and expansions through 2024 and beyond? We tapped a few producers as well as industry leaders and stakeholders to get their thoughts.
Seizing Opportunities Amid Market Dynamics
Justin Lewis is business developer for the Illinois Livestock Development Group, which works to promote and expand livestock production in the state of Illinois and is part of a cooperative effort by IBA, Illinois Soybean Association, Illinois Milk Producers Association, IL Corn, Illinois Pork Producers Association and Illinois Farm Bureau. ILDG is a free service to beef producers in Illinois, offering consultative services to help evaluate and plan for new or expanding cattle facilities on the farm.
Lewis emphasizes the historical significance of 2023 for feeder cattle and fat cattle markets.
“We are at a very profitable time in the beef industry, but also facing really high interest rates right now,” he says. “So, your cattle are worth more than before, but interest rates are squeezing that profit.”
Even with interest rates, Lewis says the surge in profitability presents producers with unprecedented opportunities.
“The past four to five years, we’ve seen real industry expansion in the state of Illinois,” he says, “along with dwindling access to pasture for cow-calf operations.”
Also driving industry development: up-and-coming producers across Illinois, whether they’re seasoned multigeneration beef producers or row-crop producers who are diversifying into livestock production.
“Young producers, second or third generation, are coming up, and with that comes growth,” he says. “They’re working on improving sustainability and increasing feed efficiency in cattle.”
The influx of young producers, eager to make their mark in the industry, signals a wave of expansion.
The industry is embracing this opportunity for growth. “In the last several years, there have been more permits applied for in the State of Illinois than before,” says Lou Lamoreux, Illinois Beef Association board member and a producer from Lanark.
Whether all permits were executed or not, the sheer number is significant. “It shows there is more interest in expansion in the cattle industry in the last few years,” he says. “It’s getting harder to purchase land, and younger farmers want to diversify and live on the farm. It’s a good opportunity to keep the younger generations on the farm.”
Building for Efficiency and Comfort
Having recently built a new barn himself, Lamoreux understands the ag business landscape when it comes to capital expenditures. Practical considerations are often driving infrastructure development in the cattle industry, he says. Of course, environmental regulations play into building for some producers, but that doesn’t change the fact that the focus is always on what’s best for the animals – and the operation.
This sentiment is echoed by Jarad Carroll of Mount Carroll, who said regulations and capacity of new cattle buildings is also balanced with functional design. He recently put up a vented gable roof barn and says, “it’s always all about the cattle and their comfort.”
The building also come with some unexpected benefits for Carroll’s operation. “We have really cut our feed costs,” he says. “I’ve been surprised how much we save. It’s a huge difference from feeding outside, where it’s hard not to spill, and you can never get it all picked up because the animals stomp it into the mud.”
Carroll’s experience underscores the benefits of development, and he says he’s more than happy that they proceeded when they did.
With a focus on maximizing efficiency and animal comfort, Lamoreux recently constructed a new 70 x 280 ft monoslope building. Not only is it a statement on efficiency and state-of-the-industry expansion, but it also underscores the industry’s commitment to innovative solutions that enhance operational efficiency and environmental sustainability.
Lamoreux emphasizes the importance of building infrastructure that not only accommodates increasing herd sizes but also enhances the comfort and well-being of the animals, ultimately leading to higher productivity and profitability. “We didn’t want to build a small building and have trouble with capacity,” he says.
The barn’s strategic design, maximizing natural ventilation and optimizing airflow, reflects a commitment to both animal welfare and operational efficiency.
“In the winter, both the bunk lines are in the sun all day. In the summer, both bunk lines are in the shade all day,” he says. “With our location in northern Illinois, prevailing winds come from the north in the winter and the south in the summer, so there’s airflow all day.”
The design incorporates an eave height of 17 ft. to increase the airflow inside. “It slows down the wind in the winter,” says Lou. “It’s still moving, but it reduces the speed. The cattle are more comfortable, and the more comfortable they are, the more they gain for you.”
Their integration of modern technologies, such as deep pits for waste management, exemplifies a proactive approach to addressing environmental concerns while streamlining operations.
“In the 1980s we were hauling three tanks with three men and three tractors for a full week,” he explains. “With the new building we put in a 12-ft. deep pit with the idea that we’d pump once a year in the winter so that we don’t have to worry about spring compaction. Our custom applicator is able to pump down an entire building in just one day.”
Balancing Demand with Efficiency
More than mere profitability, development in the livestock industry secures the industry’s viability in the face of global challenges.
With the world’s population projected to nearly double by 2050, the demand for high-quality protein is poised to skyrocket. Increasing urbanization, rising incomes and a growing middle class, especially in emerging economies, have experts projecting demand for animal-derived protein to double by 2050.
As the world population grows, the beef industry faces the challenge of scaling production while minimizing environmental impact. There is a need for efficiency-driven practices to meet rising consumer expectations while mitigating the industry’s carbon footprint, says one IBA representative.
“Currently, the U.S. supplies more than 20% of the world’s beef supply. The world population is expected to top 9.7 billion by 2050, so the demand for high-quality protein is going to grow with the population,” says Larisa Willrett, at-large policy director on the IBA Board of Governors and partner at J. Willrett Farms, a sixth-generation diversified cattle feeding and farming operation in Malta. “The beef industry will need to continue to meet that demand.”
As stewards of the land, beef producers must not only meet but exceed the growing demand. Efficiency emerges as a linchpin in this endeavor, she says, as much or more than expansion.
“In order to meet that demand for protein, there will be a need for expansion; however, I think maximizing efficiency will be even more important,” she explains. “With the everincreasing attention toward climate change and the perceived role beef production plays in that, there will be pressure to develop and adopt products and management practices that minimize the industry’s contribution to greenhouse gasses while at the same time produce more beef with fewer inputs –something cattle producers have been doing for years.”
Willrett underscores the importance of efficiency-driven practices and sustainable infrastructure in meeting these demands, emphasizing the need for collaboration between farmers, industry leaders, and policymakers to drive positive change.
Looking Ahead
As we roll through 2024 and into 2025, Lewis believes the predictions for even more leveling of interest rates, coupled with slowing inflation, should spur even more expansion and construction for the Illinois beef industry.
Twenty twenty-three was a tough year to pencil the cost of building new structures, with interest rates being substantially higher than ever before. As we see higher markets for cattle and interest rates leveling out, I think that will ease up.
Also influencing the tendency toward expansion is Illinois’ strong herd size.
“Here in Illinois, we’ve done really well in keeping our inventory numbers up,” he says. “2024 seems to be another steady year of high markets, and we’ve got a lot of different initiatives to help producers.”
Lewis highlights the federal government’s Environmental Quality Incentives Program (EQIP), which incentivizes adoption of new conservation practices such as the construction of modern cattle barns equipped to handle larger herds while minimizing environmental impact. EQIP, administered by USDA’s Natural Resources Conservation Service, aims to help farmers maintain or improve production while conserving natural resources.
“A lot of beef producers are really focusing on important different opportunities like EQIP, using it to for moving cattle into buildings or installing curtains,” he says.
Renewable energy is also gaining a lot of attention, Lewis reports, underlining the livestock industry’s commitment to addressing environmental challenges while capitalizing on market momentum.
“We’ve seen a lot of interest in solar,” he says. A variety of financial incentives including low-interest loans, grants, tax write-offs and subsidies are available to help mitigate the initial investment for producers to install solar energy systems.
Producers interested in leveraging these programs don’t have to go it alone. Lewis is an expert in these programs and available to help strategize, whether you’re looking to increase capacity or responding to an EPA directive. “I am a resource across the state,” he says. “It doesn’t matter if you’re a member or not. If you have questions on buildings or the Livestock Facilities Management Act, I can help.”
Knowing that some producers haven’t had great luck tapping into EQIP, he offers this advice: “EQIP is not necessarily free money. It’s about identifying solutions to current challenges. As the name indicates, they really like to solve environmental issues: manure management, runoff. They’re looking to help producers fix an existing problem.”
As the Illinois beef industry charts a course for the future, collaboration and innovation remain paramount. From leveraging incentives for sustainable infrastructure development to embracing efficiency-driven practices, producers and other stakeholders are poised to address the complex challenges and opportunities that lie ahead.
“By its nature, the beef industry takes a long time from conception to consumption, so it will take at least two years for herd expansion to have an impact on beef supply,” says Willrett. “The current reduced production will cause an increase in cattle prices, providing incentives for expansion, perhaps over the next two years.”
By prioritizing sustainability and efficiency, Illinois is poised to lead the way in shaping the future of livestock farming.
Justin Lewis with Illinois Livestock Development Group can be reached at (217) 251-5020 or lewisildg@gmail.com.
