I realize I’ve written numerous columns about beef and its high prices in the last year, but it is big news for consumers, processors, feeders and producers alike.
Every month, there is big news about beef at the meat counter, including consumers paying record prices and cattle bringing in record prices for producers.
I don’t think there has been a span of months this long where cattle prices have steadily continued going up. Futures have wobbled a few times in the last couple of years, but cattle prices have just kept rising with no end in sight.
High prices at video and private treaty sales, along with sale barn results, are the talk every week.
In fact, every week talk in the hills seems to begin with, “Did you hear about such and such sale results?”
Then the next week starts over again with even higher prices.
Selling and buying heifers and pregnant cows for replacements is a very hard decision for cattle producers to make these days. Ag economists say one should figure out how many calves it takes to pay for replacement heifers.
CattleFax said in 2025 this figure is projected to average 2.75 calves, which is well below the long-term average of 4.5 calves and beneath the 2015 peak of nine calves. One negative factor is this ratio is bound to rise as bred heifers and cows go up and if calf prices drop off.
Depending on the producers’ economics, are pregnant cows too expensive to sell?
If one looks at past cattle price cycles, cattle producers realize, in an average 10 years, two of the 10 years are going to be good, four or five years will be okay and the remaining years are going to be a challenge.
The past few years have been head-scratchers with the high demand for U.S. beef worldwide and the record-low U.S. cattle herd. Producers have enjoyed higher prices for cattle, but not high input costs.
Managing or spending dollars on a farm or ranch is not the worst job in the world. A good accountant and investor are crucial to help make correct decisions.
As expected, consumers are buying more ground beef, but with lower numbers of processed cattle, lean beef is down. Because of the heavier fed beef carcasses, there is an over-supply of fat trimmings, so processors are buying more lean trimmings from other countries.
Through last June, the amount of fed cattle processed was down four percent, but average carcass weight of yearlings was up three percent, which is really helping packinghouses and their income losses.
The U.S. - Mexico Border is still closed, so South America, Australia and New Zealand are exporting a lot of lean beef to the U.S. We just need to be careful where these lean trimmings come from.
When it comes to beef prices, everyone has tossed away their crystal balls and are hanging on tight.
Dennis Sun is the publisher of the Wyoming Livestock Roundup, a weekly agriculture newspaper, available online and in print.
