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Tyson Foods (TSN) CEO Donnie King spoke at the BMO Global Farm to Market Conference in Toronto on Wednesday, expressing much uncertainty about when US ranchers will rebuild tight cattle herds meaningfully. 

Reuters was the first to report King's comments at BMO's farm conference. He stated ranchers had been pressured in recent years to offload cattle due to high grain costs and drought, which, in return, sent the nation's beef cattle herd plunging to the lowest in more than half a century. 

King provided some encouraging news, citing slightly lower grain costs and improved grazing conditions in the Midwest as factors in increasing the US herd. However, he noted that a high-interest rate environment is a significant headwind. 

All in all, King's comments did not provide confidence that the nation's beef cattle herd would reverse from seven-decade lows as ranches continue offloading cows to slaughterhouses. The latest figures from the US Department of Agriculture show that the nation's cattle herd is 87.2 million head (as of Jan. 1), the lowest level since 1951. Data from USDA in the chart below only goes back to 1974. 

Shrinking herds means fewer cows, as the latest slaughter price per 100 pounds is around $186, the highest ever and in breakout territory. 

We have explained that ranches have been culling more cows for several years because of droughts, surging feed costs, and high interest rates. 

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This perfect storm has sent beef prices at the supermarket to record highs. 

Lane Broadbent, president of KIS Futures Inc. in Oklahoma City, told Bloomberg earlier this year that herds aren't expected to rebound before at least 2026. 

We suspect retail prices will go higher until demand destruction is achieved. Seasonally, outdoor cookouts ignite an upswing in beef demand in the coming weeks. 

Can the Fed just print more beef? Oh wait, no, but you know who can: Bill Gates.

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