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2026.10.05 | TB | Agriculture | US Beef Production & Cattle Supply

原标题：US Beef Production – Navigating Low Cattle Supply, Demand Elasticity & Supply Chain Risks

#agriculture

Third Bridge · 2026-10-05

Analyst-led • 10 Sep 2026

Companies: TSN US

Mike Tanner (MT) Member of Board of Directors at Heartland Prime LLC

Natasha Nair (NN) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

NN [00:00:03]: Welcome to Third Bridge's Interview entitled US Beef Production – Navigating Low Cattle Supply, Demand Elasticity & Supply Chain Risks. I'm Natasha Nair. I'll be facilitating today's Interview with Mike Tanner, the current CFO at Kinnard Farms and the former Director of Cattle Feeding at American Foods Group.

Mike, before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

MT [00:00:35]: I agree.

NN [00:00:37]: Great. Thanks so much. Could you please provide a brief introduction to your background?

MT [00:00:43]: I've been involved in the US beef industry off and on now for a little over 36 years. I started in the industry in the early '90s. As a young graduate, as a cattle buyer and throughout the years, then worked my way into because of my background in college education into leadership roles, ultimately managing not only cattle procurement, managing operations at beef processing facilities. I also have a background, grew up ranching and farming and spent seven years with a very large cheese or dairy company doing a risk management where I would place hedges using futures markets, options and futures contracts, cash contracts to offset risk that in our raw material procurement. I did this both in the dairy industry and also in the beef industry. Then I moved into executive positions, both Vice President of Operations for a large packing plant out in California and then also as you stated earlier, as a Director of cattle feeding for one of the largest meat processors in the United States and currently the Chief Financial Officer at Kinnard Farms and currently a Board member for a start-up of beef stick or a beef product retail business that's going on right now.

Questions

00:02:46] Do the recent import measures discussed by the current US administration offer a true fix for structural supply shortages, or are they merely a short-term patch?

MT [00:03:24]: I believe it will be a short to a midterm fix for the retail customer, lowering ingredient or beef ingredient prices at the retail shelf for the customer. It will have a negative impact or which it is already having a negative impact on the producer. It would be the farmer or rancher that is currently supplying US beef. We've got a two-edged sword. It's going to help the retail consumer, but at the same time, it's going to negatively impact the price that's being paid for the beef animals.

00:04:13] How do reduced tariff rates and discounts on 300,000 metric tons of lean beef trimmings temper high retail beef prices? In the short-to-medium term, what are we looking at here to alleviate that for the retail customers?

MT [00:04:39]: What's taken place here in the US over the past several years is we originally prior to COVID, we saw some natural impact to our industry, to the beef industry with weather conditions and feed supplies so that our beef herd got or the beef herd shrank, meaning the number of mother cows that were in a live population shrank as they ran out of feed sources, they would ship them for slaughter, which then those animals went in for producing hamburger, mostly hamburger. As we moved into these… Really, it started in about 2021 during COVID, where we saw a huge government intervention that took place where they stepped in and started paying and buying, basically competing with the cattle market, the open market, retail market, the suppliers and producers in the retail markets for beef and dairy products to put into their meal programmes at the time. They artificially inflated the market or the price for these beef animals. It, in a sense, accelerated or encouraged beef producers to continue to cull their herds and sell females into the slaughter market because of the prices being artificially held high, and that continued keeping the American beef herd at a very low population, which, again, continued to accelerate these extremely high prices being paid or being paid by these competing meat packers for these animals.

That's kept us in this state where these prices ended up getting to a point where the consumer said, "Enough is enough, we're going to move into a cheaper protein, whether it was chicken or pork." Then, of course, with the new administration stepping in and started tariff wars, that, again, kept fuel on this fire of high prices, which ultimately, administration is utilising imports to in my opinion, it's going to just be a temporary to try to decrease these prices temporarily in the retail market because right now, the fundamentals, the base underneath this market is we've still got a shortage in the US beef supply, at least on the beef herd side. There will still continue to be competition for these animals with competing meat packers for them. Yes, this to me is just a temporary fix for the retail customer, not for the meat packers or the ranchers.

NN [00:08:19]: Is the prolonged tightness in the US cattle supply primarily attributable to 2021 government interventions, or to weather conditions and drought? What is the core driver?

MT [00:08:38]: We in the industry, we have cycles. You can even go back and see the weather cycles. This isn't what happened with the American cow herd wasn't really that uncommon. It was just a cycle. That cycle occurred. Again, I'm going to point to COVID, the perfect storm with a heavy government intervention that caused this. There's a couple of things now that are going to be impacting whether this US beef cow herd increases or continues to either stay status quo or actually continue to decrease. There's a couple of factors that are impacting that.

00:09:38] How would the emergency import measures alleviate retail prices? How would that have a negative impact on the producers, farmers and ranchers? What are the effects on domestic herd rebuilding efforts along with signals and cattle producer margins?

MT [00:10:12]: One of the biggest incentives for the cow herd to not increase is these record high prices for what we call in the industry, these cull cows or even these young breeding age animals is there's just a record high… We've had it now for several years, record high prices for them as a cull animal, an animal to bring into beef processing, which we hadn't seen ever as that high value on these. That's incentivised them, the ranchers and even the dairy industry to ship animals earlier than they normally would. On the beef herds, I believe if the USDA's information is accurate, we've got probably one of the youngest cow herds out there in history now just because right now, with the extremely high prices, they've just been incentivised to ship animals to market that they would have hung on to for a couple more years. What's happened with the import market, we've got these artificially high market prices for these cull animals. Now we bring in this imported trim, which is directly competing with those record high prices for those cull animals, it will temporarily bring that price down for those cull animals.

That will slow the decision of these ranchers and farmers to start to hang on to some of these older animals or build the age of their herds back up. Again, it's only going to be temporary because these farmers and ranchers, they're not getting negatively impacted right now. It's only the retail consumer that's being negatively impacted by these record high prices. The farmers and ranchers have seen record profits on their animals over the last several years. This imported trim is only going to be a temporary fix until the import pipeline gets filled up and the market adjusts itself, that equilibrium comes back into the market. That's a roundabout answer to that question.

00:13:06] What key triggers or margin thresholds would incentivise remaining cow-calf operators to retain heifers and begin rebuilding, given drought conditions and elevated input costs? Will the new import measures incentivise them in any way?

MT [00:13:42]: To me, it will. We've just got to see at what level that price drop if these imports… There's a couple of things going on. Number one, the imported beef that's coming in is very low quality compared to the US beef. You've got a very low-quality beef product going in that we're already seeing it. The consumer is already starting to complain, especially in the retail beef product industry that I'm in, that the competitors that I'm looking at, the product they're putting on the shelf, utilising this imported beef, you can tell the consumer is already starting to complain about the taste and the quality that's in it compared to the US product. That's one thing that's got to be looked at that the consumer is going to start to back off on that product, which will drive the demand for that import product down, but that's going to be probably at least a year out before we start to see the impact from the consumer saying, "Hey, the quality of this stuff is awful compared to our US product." We've got that one on the side. On the other end of this thing, the market is going to determine where that price point has to drop down where these cull animal price drops hit that will incentivise these producers to hold back their animals.

The other factor that's impacting this is we've got a retirement age. The majority of these ranchers and farmers out there, the next generation that's standing in line isn't interested in replacing them or if they are interested in it, it's only as recreation. Now we've got a next generation that's not there to take over. There needs to be an incentive. The cost of entry to get into ranching and farming is so high right now. It's just a negative to getting these new generation farmers and ranchers incentivised to step up and basically farm and ranch here in the US. We've got a couple of things that are outside of just the imports alone that are going to impact this, trying to rebuild this US herd.

NN [00:16:20]: Why hasn't the recent period of record profits incentivised the younger generation to enter the ranching industry, and what measures could effectively encourage them to take over?

MT [00:17:02]: Right now, we've got record high land prices that are just a huge deterrent right now for a young person to even get out and try to build a ranching operation or even a dairy operation. Then also on top of that, you've got record high prices for these female animals… How do you get in? The cost of entry is so high right now. One or two things need to be you either need to have the land paid for or the cows paid for. You can't be in debt on both of those and have a realistic breakeven be there with the current economic conditions. To me, there needs to be some way somehow, whether it's through inexpensive lending, borrowing or some type of an incentive. We're wondering where that next generation is going to come from or where this next generation is going to be able to get into this industry. It's with record high land prices and record high cattle prices right now, it's just the barrier is so high to get in.

00:18:44] Following the recent import measures, what was your reaction to the US administration's newly rolled out Ranchers First Initiative?

MT [00:19:21]: My honest first opinion on it was it was more of a political move to generate votes just because they're trying to make it sound like the ranchers hurting and they're not. Like I said, the last, shoot, since pre-COVID, they've been. The ranchers and farmers or raisers of beef have seen record returns. Their P&Ls are looking fantastic. The ones that are hurting in the industry are the meat packing companies. They've been for the last, I'd say, going on three years now, been in negative margins. I mean, to the point of reaching several hundred dollars per head loss on animals that walk through their processing facility and the retail customers. Those are the ones that have been negatively impacted. The good part that I've seen in this initiative would be probably the disaster recovery support and the one I kind of chuckle at is for meat processing capacity, for several years, we've had overcapacity. In fact, you've been seeing that with Tyson closing down plants and a couple of the bigger meat processors actually closing some of their more inefficient processing plants. That's due to the overcapacity that we've got meat processing capacity in here.

The other one would be within that initiative is the support for either a beginning or the veteran rancher. That's where I would see there's a couple of positives. Again, I think the government needs to step out of this as much as possible. Again, they were the cause of it in the beginning. If you're truly going to have an open market, let the market dictate it. That's what needs to happen, like with the tariffs. If you're just going to use tariffs as a political tool, it's going to keep the economy really messed up. If you let the economy do what it's designed to do, it will bring itself into equilibrium, and it will weed out the poor producers, it will weed out the poor processors. It will weed out the poor retailers and bring this back. Yes, so that's a long answer to my feeling on that initiative.

00:22:11] Considering current interest rates, what are the operating capital requirements for young and mid-sized ranches to scale operations or replace equipment, and how effectively will the proposed government initiatives address these financial barriers?

MT [00:22:58]: Depending on how far they're willing to go, within that initiative, especially on the financing side, I could see a couple of things where the government could step in and really help. It would be allowing financing with little or no down, maybe utilising some of their asset base as collateral, but also bring in some of that, open up some of the government land and make that available for them to farm and to graze that would lower their production expenses. Do it over a certain time period, at least maybe a five-year period to allow them to see if they can't get a foothold in the industry through lower interest rates, very easy accessible funding and then also low production costs, keep the production cost by opening up again either some of the government land or even some of the government surplus of corns and grains to allow them to feed the animals and get them to market. I could see that. We'll probably get into this a little bit later. To me, there's a new beef industry that's starting to build, and that was one of the additional questions I shared with your statement was the dairy industry right now is so incentivised to produce cross-bread animals.

Those are animals, they're dairy animals, the cows are crossed with a beef animal and those calves are coming out and going into the beef process or the beef pipeline, the calves are… What's unique about that is in the beef industry, it's very seasonal. You'll get your big influx of beef animals going into the feed yards and getting ready for processing all at a certain time of year in the fall type of year or in the spring, but it's very seasonal, where with the dairy industry now bringing in these cross-bread animals, they're coming in every month. Now you've got a steady supply that's coming in. That's a one-off that's happening. I went off track on your answer there, but it's feeding that pipeline.

00:26:10] How effectively would the proposed specialised heifer retention insurance – specifically the BRAND [Beef Retention and National Development] endorsement for Livestock Risk Protection – stabilise risk for cattle producers? Will that measure definitely address the core issues of herd rebuilding?

MT [00:26:48]: I really don't. I don't believe that, that's going to do what they think it's going to do. Again, the only thing that's going to incentivise that to keep your heifer retention is going to be the adjustment in the market price. Any time the government steps in and starts to throw money at something like this, again, it will be a real short term. There will be a few people that will attempt to participate. Livestock Risk Protection insurance on both these baby beef calves that are born in cull cows that are going into the beef processing. It would have to be a programme that really is connected right now. I believe this would be connected the same way. It's all connected to the futures markets.

To make this work, they would have to connect it to the cash markets. Somehow the insurance, the way that they would price and the way that they would do payment on this would have to be connected to the cash value of these animals and some factors, some indicator within the cash to make this have a retention insurance actually work. No, right now, people in our industry don't believe that that would even work if they're trying to do it similar to what they're doing with the other what we call the LRP or the Livestock Risk Protection on calves and cull cows.

00:28:39] What is the most likely future scenario for US cattle supply and herd size, and how does the US dairy industry currently impact the overall supply situation?

MT [00:29:13]: What we've got right now, especially on the dairy industry side and what I believe is probably on the crop production side is we've got a huge bubble, a huge financial bubble. What I mean by that bubble is it's a financing bubble with the bank. Right now, in the dairy industry, the US dairy industry is not profitable at where the prices are currently for milk. The crop production is not currently profitable based on what they're getting paid for or the commodity price for grain. What keeps these operations going is their asset base, meaning the land. What they're doing is every year within this, especially in the dairy industry, you need to go out and purchase land. You can use that as an asset to borrow money. You need to borrow money every year just to keep your operation going because, again, current prices of the commodity price for milk, commodity price for grains will not pay. There is not a breakeven on that to cover your mortgage cost of the land, to cover the production costs. both on dairy and crop. What's happened is there's a bubble created. What they're doing is they're pushing that debt rolling it forward into the future. What it's doing is there's this competition for land here in Wisconsin.

We've got land prices as high as USD 20,000 an acre. You're going out and these farms have to buy USD 20,000 an acre land just so that they can use that as an asset base because you cannot produce corn on there that will pay for it. You cannot produce a dairy animal that can produce enough milk that would actually pay for USD 20,000 an acre land. That is only being utilised to be able to go to the bank and borrow money to keep the operation flowing for that next year and that next year. We've created this huge, huge bubble that will pop if land prices drop and the value of that asset, which the bank has loaned against, drops or the prices drop to a point where they cannot even keep the cash flow coming in for making the payments on that loan. To that point, and I'm sorry, lost track of where the question you had asked me on that, but that is a huge risk right now in this overall industry, and that's where these land prices have just been so artificially inflated to try to keep these couple of industries going right now.

What that's done is if you go and you try to put a business proposal or you go in and try to put a business plan together, there is no way you can… Land prices out in the Western United States where you could get into it for a couple of hundred dollars an acre have now they're 10x that. There is no way that you can produce beef profitably if I went out there to try to buy 5,000, 8,000 acres, to raise these animals on and I'm having to spend anywhere from USD 3,000 to USD 4,000 to USD 5,000 an acre, you can't do it. The breakeven isn't there. The market isn't high enough to cover those costs. That's a huge issue right now. I may have lost track of the question that you had asked me on there.

00:33:28] What is the realistic scenario and timeline for a market price correction, and how might this adjustment resolve the current supply and profitability issues in the US beef production industry?

MT [00:33:52]: Again, I don't know when, but if we could get government intervention out, again, this was all accelerated back in 2021. I mean we saw it with the futures market. We saw it on the cash markets. The minute the government stepped in and started to artificially support the markets, it just accelerated everything. There needs to be a market adjustment that needs to be allowed to happen. If they would leave the tariffs alone, allow the imports to come in, absolutely. That would provide. If they would allow it to be long term, consumer may not allow it to be long term, but it could be temporarily to bring these prices down to where they need to be, at least from a beef standpoint and incentivise to build our beef herd back up. I don't see that happening because we don't have a generation to take over and land values are so high that the people that own the ranches now, they're selling everything out, and it's going into either development or recreation. That's where I see the beef industry is going to end up moving into the dairy industry or the dairy industry is now supporting the US beef industry. Unless the land is the key. Everything is based off of this land, unless we can get these land prices into perspective. Yes, there's just going to be… We're going to force this industry into these other countries.

00:36:06] What are the potential solutions to alleviate the inflated land values currently burdening the agricultural sector?

MT [00:36:28]: Again, if the government wanted to step in and do that to open up some of their government-controlled land to grazing and to some farming and keep it at levels. You get a lot of pushback from the existing producers out there saying your cost of production is lower, but the biggest thing is we're going to have to let this bubble pop. We've got to get government out of it, if anything, temporarily, let the market correct itself the way it's supposed to. It's being artificially held up. We saw that in the commodities market, the futures, even in the stock market beginning in 2021, where there was just a lot of government money that was going in to support these markets and not allow a recession to happen or not allow the market to correct itself to do what it's designed to do. Yes, right now, everything is sitting at a critical point that as soon as they can back off, yes, we'll go through some pretty scary times here in the short term, but let the market adjust. We'll see probably a rash of banks that would have to file with all these loans that they've got out against these inflated assets. It just needs a huge market adjustment to be allowed to have happen.

00:38:17] How does bolstering independent meat packers and their market power address current issues in the US beef industry, and what is the strategic value of expanding regional processing?

MT [00:39:05]: That's what we found in our market research, getting our retail beef product into the retail markets is what we found now is the consumer is telling us they want to know where their food is grown, where it's coming from. Basically, they're saying they want regionally produced and locally processed. There's a huge shortage of that, both on the beef and the dairy side that over the many, many years since I started in the industry in the early '90s, we saw a lot of consolidation on the beef packing side to where now you've only got a handful of major, major international beef companies and major packing companies. What's the consumer is asking for now is we want to see it regionally produced and sustainable. Absolutely, there's a huge opportunity right there. I could see a positive from a federal standpoint, whether it's from getting these regionally produced production facilities federally inspected and USDA supported to incentivise them from a labour standpoint because that's a huge factor right now as there's just a labour shortage of those type of workers to support that industry, but absolutely huge, huge opportunity on the horizon. That's why we're seeing a lot of these bigger packers now starting to shut down facilities.

NN [00:41:01]: How effectively does improved access to regional processing capacity support farmers and ranchers while expanding their market access?

MT [00:41:16]: It's huge. One of the biggest things that we have to look at right now is freight to the processing facility and freight of our finished product to the consumer. What the business model is showing right now is that keep everything as close to where your production is of the live animal for the most profitability and also for a higher quality product is being able to keep both production and distribution as close to the source as you can.

NN [00:41:55]: Do producers desire to process their own products for sale to consumers? How capital intensive is that, and is that viable or scalable?

MT [00:42:16]: It is. If you talk to almost every rancher, I've worked with a large rancher out in Arizona to help him get his own line of beef going that now he markets regionally throughout Phoenix in the Southwest. We've got even small farmers now that are raising animals and processing them and marketing right off farm, farm to fork marketing. Hugest incentive right now in the industry.

00:43:15] Is product sourced directly from the farm too specialised to capture large-scale growth, or do consumers view it as a highly demanded premium product?

MT [00:43:57]: Great, great question because you've hit on one of the challenges that we're facing right now with the beef product that is production capacity. We need to find a facility that can produce the number of animals that we need so we can supply regional customers. The amount of animals to go to a major packer, we're not at that point yet. We probably wouldn't be at that point for a couple of years. The major packers require a larger number of animals to run through their facilities vs a local or regional producers right now, they're so small, they can't handle the required number. We're stuck in that no man's land of trying to find a big enough processor yet small enough that can accommodate customers' demand. Excellent question. Right now, where the industry is missing is at that mid-level production that we need.

NN [00:45:15]: Do you see that as the main growth opportunity on the processing side of the whole beef value chain in the US? Do you see capital or investment being poured into trying to meet that?

MT [00:45:39]: Absolutely, do we go in and partner with somebody and bring in the capital to grow them to the size we need them? Do we build from the ground up?

00:45:58] Given expanding federal antitrust scrutiny, what role have grocers and the Big Four meat packers played in driving record retail beef prices?

MT [00:46:34]: The way that they have to work, this is coming from having worked for two of the Major Four is they've got a pipeline that they got to keep full and they've got to keep moving just so that they get that economy of scale. They've got high costs that they've got to cover. They've got to keep animals moving through their system. No matter what, they've got to be selling product. They've got to be moving product. From the retail side, so then you've got that side where you've got them producing, producing, producing and having to move inventory just so that they can stay in a production mode to keep their facilities running and paid for. You got on the retail side, which is primarily driven… It should be solely driven by the consumer demand out there. You've got on the retail side, then the packing house is having to sell to them at the highest price they're trying to get. Retailer is pushing them for the lowest price that they can get. When there's a market adjustment or, let's say, prices drop like when these imports come in, there's going to be this huge delay. The retailers, they hang on to that high price as long as they can, even though it might be 3-6 months where the packing house has lowered their prices to them to sell that and move that product. The retailer is the one that's very, very slow at adjusting their price.

The consumer, if they want to move beef, they'll adjust their price, but let's say the packing house has to adjust their price 50%. That retailer may adjust their price to the consumer 10%. It's not a direct correlation on what's happening on the production side from a cost standpoint. When these cheap imports come in and they're running into the packing house and getting ground and turn into hamburger, yes, the raw material cost drop for that Big Four meat packer, but that retailer is still very slow at lowering that price. They're taking advantage of that price discrepancy or that price movement to their advantage. Yes, there's I guess you'd call it… That's just a common action that the retailers take.

NN [00:49:26]: Did you mention earlier that retail prices will not drop for at least another year?

MT [00:49:34]: Well, we're starting to see it on some beef products out there that they were able to get cheaper imported beef into their product, and we just started to see this past month where they started to lower their prices, but that's direct marketing. That's not through the retail chains. That's the other side of this coin is that there's that internet or direct marketing where we saw the price adjustments happening almost immediately, but yet the retailers are the ones that are really slow to change it.

00:50:15] What is the growth outlook and expected timeline for mid-level, non-major processors to expand capacity and gain market share within the US beef packing industry?

MT [00:50:57]: Everything is going to depend on what the current administration is going to be doing and incentivising. Right now, there's a shortage of workers. What I mean by workers, it's the ones that are willing to work those heavier labour jobs, processing jobs. Right now, that's one of the biggest negative impacts to our processing capacity right now is there's not enough help out there, not enough labour force. If there was anything that they could do to help incentivise bringing workers in for that, that's what would happen. Right now, the demand is out there. The two things that are preventing the building and the construction and coming in, it's just labour and expensive money right now from a financing standpoint.

00:52:09] For how long have labor shortages in both meat processing facilities and agricultural production acted as a cost headwind, and how do you expect these challenges to persist?

MT [00:52:27]: That probably really started back in 2019-20. Now it's just really, really accelerated this next generation of workers, let's say, US citizen type workers, if I can say it nicely, very poor quality. They choose not to work. They'd rather work three or four days a week, a nine to five if that vs if we had our international visitors and international programmes that we've got, that's who we really depend on now in the agricultural industry is finding that individual that really wants to do that kind of work. That's what's hard right now. There's a huge competition for those good quality workers that are willing to do that type of work. I mean, you can go down and see the billboards offering USD 30-40 an hour to come work at our packing plant or come work on this dairy farm and your starting salary is going to be USD 70,000 a year. There's huge competition for those good workers, and there's not that many out there.

00:54:05] Given OPEX, what financial conditions might force major US meat packers to shut down large-scale processing plants? What has been the trend so far?

MT [00:54:24]: We've actually hit that point. Now we're seeing not only from the big ones, we saw Tyson announce their closure on a couple. We've seen the one I used to work for, they've closed one of their facilities. They're at that point. I mean they've had negative margins now for, I think, going on at least three years. Three years now, 2.5 years, some big negative margins, and they're at that point now where they can no longer just justify keeping them open and swallowing the loss where they don't see a light at the end of the tunnel on it right now. Yes, you're going to see more of them here I would see probably in the next 6-8 months, you'll see a couple more bigger processing facilities closed down.

00:55:38] What's your outlook for the Big Four meat packers in terms of their control of the beef processing market? On what timeline do you expect their 85% market share to meaningfully diminish?

MT [00:55:59]: I mean you're seeing it now. Yes, that's a good question because the biggest is our big international player. The ones that are international are going to be able to take advantage of their international production outside of the United States and be able to utilise the profits from that side to cover the loss in the US. I won't be specific on the name, but they've already sold some of their assets in the US on the production side. It's the ones in the US that are primarily just US-based that are going to hurt. They're the ones that are going to have to get down, drop their processing capability down to the level to meet what the current population of available cows or their raw material availability. Right now, they still exceed what's available in the market, which that's why they're competing for those animals driving the prices up. When they start closing more doors and the ones that have the deeper pockets that can survive that shift down, then there'll be less competition for those live animals, and it will readjust the price to where they can at least hit a breakeven. We're probably going to see that here in the next 12 months.

NN [00:57:53]: Given that consumer demand for beef remains strong despite high prices, how will retail pricing be affected if processing capacity reduces while demand persists?

MT [00:58:16]: Yes. Then again, if they keep tariffs open and we keep that cheaper product coming in, we should see retail prices adjust down. The demand is going to stay high as far as what we can see and what we know from the consumer. Right now, protein is everything. Anything that you can make with a certain amount of protein, beef is one of the highest protein products out there. The demand is going to stay out there. Again, it's going to be keeping that consumer at the right level to where you can keep them, produce… You don't hit that point of demand elasticity where they start backing out of the market. The demand for beef is going to stay there, especially US beef. US beef is the highest quality beef in the world right now. Consumers want their protein. We've got a lot of positives out in the market for that. Right now, it's just we've got to bring the price back to where that consumer will continue to keep purchasing from us. The big factor is going to be yes, just getting the overproduction down to the level that meets the current supply.

NN [00:59:50]: Is there a specific retail price point that would cause a meaningful shift in consumer demand away from beef? The elasticity seems to be not much of an issue for the consumers.

MT [01:00:10]: Yes. We've hit it. What we've seen from our competitors on some of the retail beef products out there, they're just attempting to move inventory right now because they hit that point where the consumer said enough is enough. I'm only willing to pay so much for a hamburger. I'm only willing to pay so much for a beef stick. Now they're having to move through some inventory. What they've done is they're willing to take a loss to move inventory otherwise. I mean it's either the loss of throwing your product away or loss of selling it at a discount to the consumer to get them to take it. Yes, it's an interesting dynamic right now, but we did hit that level where the consumer said enough is enough.

01:01:28] What is your outlook for the US beef production industry in the next couple of years?

MT [01:01:49]: My outlook is if the dairy industry can survive, that bubble doesn't pop on the financing and the land side. The dairy industry is the new beef industry for the United States. I say that just because I know this generation of landowners out there, unless we miraculously get an influx of young farmers and ranchers that want to dedicate themselves to this type of work. Yes, the ranches are going to be sold for… They're just going to be more hobby, and we'll be moving production to other countries from a beef standpoint other than the dairy industry here in the US.

NN [01:02:46]: Yes. Great. We'll leave it there. Then, thanks so much for providing all that great insight into the beef production landscape in the US. Really appreciate you spending this hour with us. Have a great rest of your day. We'll be in touch.

MT [01:03:00]: Thank you.

NN [01:03:00]: Thank you. Bye.

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