Dennis Sun: Good News – Beef Cattle Processing Is Way, Way Up

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By Dennis Sun, Wyoming Livestock Roundup

As we start the Christmas season, I’m always looking for positive issues. Ranchers and farmers, along with others in agriculture, have had a tough year due to the high cost of inputs and inflation.

We all feel bad for those in the sheep industry. They have to suffer through a downward trend in lamb prices while saddled with high input prices. 

Since 2015, ranchers haven’t had much to brag on concerning cattle prices, but starting the second half of 2022, prices were looking up. And now it’s happy news to start the Christmas season. We’ll take it and enjoy it. 

Most every time I mention higher beef prices, someone always talks of rising input prices and I get it, but just think where producers would be if we had lower or falling beef prices.

The talk now is how high calf prices will go and the answer is, who knows? I’ve heard as high as $5 a pound for a 500-pound calf next November. At this price, one wonders what the cost of beef will be in the grocery stores, and if those high prices will drive customers toward chicken and pork.

Diminishing cattle numbers, strong numbers of cattle processed weekly, especially cows and heifers, strong beef exports and good beef demand at the local meat counter are driving the higher prices.

They say 2022 is looking to be an exceptional year for beef prices. If cattle slaughter stays the same in November and December, the proportion of beef cows and heifers slaughtered would be around 47%. Using this analysis, it would suggest a decline in beef cow numbers somewhere around the 4% to 5% during 2022, which would be levels not seen since 1985-86.

Through October, heifer slaughter was up about 5% overall in 2022, as compared to a year ago. Beef cow slaughter is about 13% higher than a year ago. 

Combined, about 765,000 more beef cows and heifers were processed in the first 10 months of 2022 as compared to the same period in 2021. Due to the drought, higher input costs and higher slaughter cow and bull prices are the reasons for the strong numbers processed.

Cattle on feed estimates are down last week 2% and placements were down 4

%. Even with higher feed costs, the average profits for cattle feeders are $222 per head, the highest since late last April. The feeder cattle runs are starting to decrease, and so we’ve probably seen the low on those prices.

With milk prices rising, the dairy industry is adding dairy cows. The last couple of years, dairy farmers have bred their cows to beef-type bulls, mostly Angus, using sexed semen to get a certain number of bull calves. The outcome is a better beef steer to be processed at a higher grade and a better cut of meat. Hopefully, this will mean less lean meat imports into the U.S.

Times are looking up for beef producers and feeders. I just hope we don’t get any surprises to challenge the good prices.

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