Recent announcements from JBS USA regarding the closure of two facilities in Pennsylvania and Tennessee are fueling broader discussions about the future of U.S. beef processing capacity and cattle herd expansion. A report highlighted concerns from livestock market analyst Brad Kooima, who believes the industry may face significant changes in the years ahead.
JBS said the closures are part of a broader strategy focused on growth, modernization and long-term competitiveness. While the company views the moves as part of a business realignment, some market observers see them as a reminder of the ongoing shifts occurring throughout the beef supply chain.
Kooima, a livestock market analyst with Kooima Kooima and Varilek Trading, said additional infrastructure changes remain a possibility as producers begin rebuilding cattle numbers following years of drought-related herd reductions.
“It doesn’t take a big leap of imagination to think you could lose another plant,” Kooima said.
Beef Industry Herd Expansion Appears Likely
According to Kooima, improving conditions in key cattle-producing regions could encourage producers to begin expanding their herds.
“Texas is the number one cow state there is in the United States,” he said. “If they’ve got feed and they’re incentivized by price, and if they think it’s finally safe to go out in the woods after they get through this screwworm thing, of course they’re going to expand.”
Kooima pointed to recent rainfall in Texas and favorable market incentives as factors that could support herd growth. He also noted the continued growth of beef-on-dairy production, which is increasing the supply of cattle entering the beef system.
“People ask me that. Do you think they’re really going to expand? Well, I know they are,” Kooima said.
He believes expansion is already occurring in some regions, particularly where forage conditions have improved.
Beef Industry Herd Expansion Raises Capacity Concerns
While herd expansion could boost cattle supplies, Kooima cautioned that growth must remain balanced with available processing capacity.
“I just don’t want us to get down the road two years from now and then we’re going back into the, oh my gosh, now we can’t get a bid and too many cattle and not enough hook spaces,” he said.
Kooima expressed concern that rapid expansion could eventually create market imbalances similar to those experienced in other livestock sectors. He referenced major industry changes that followed the hog market downturn in the late 1990s and said he hopes the beef industry can avoid a similar scenario.
“I don’t want to see that in ours,” Kooima said. “Hopefully I’m overreacting, but I don’t think I am.”
As producers evaluate expansion opportunities and processing companies continue adjusting infrastructure, industry leaders will be closely watching cattle supplies, packing capacity and market conditions over the next several years.
Hear more from livestock market analyst Brad Kooima on beef industry trends, herd expansion and processing capacity concerns by listening to the interview below.