The biggest news in agriculture this summer has been the long-lasting drought. While it isn’t affecting the entire region, it does cover over 65 percent of the area, which is a huge blow to local agricultural economies.
Currently, most livestock producers and farmers are facing both a forage drought and a hydrological drought – something we have not seen in many years.
This has caused a selloff of both cattle and sheep. While prices are higher than usual, restocking animals is going to be expensive. The loss of genetic improvement producers have made over the years will not be easy to replace.
Everyone wishes they had a crystal ball to help make decisions as the effect of this drought will be felt for some years. There is no telling where the end is.
There is an old saying which states, “It usually takes a hard winter to break a drought.” It is usually true.
The shortage and high prices of hay will not make it any easier. We are all looking for some rainfall from the monsoon, and having Cheyenne Frontier Days running usually brings some rain.
This drought will affect the price of beef for a number of years as ranchers have been selling replacement heifers. This action will delay cattle herds gaining in numbers for some time and will keep the price of beef up for producers.
There are a number of factors guiding the cost of beef. The most likely reason is federally inspected cattle slaughter numbers are down by 7.8 percent. The steer and heifer slaughter numbers are down close to seven percent.
But the good news is yearling dressed weights are up 20 to 30 pounds compared to last year and 65 to 95 pounds above the five-year average.
We can give ranchers a big thank you for their improved cattle genetics and, in some cases, cattle feeders for feeding the yearlings longer. Meatpackers just want beef and beef fat to mix with imported grind.
These dressed weights have made up some for the low numbers of cattle processed.
One of the big reasons for beef prices being where they are is the demand for beef. Beef sales at the grocery store are a high percentage of all of the total fresh meat sales. While all fresh meats are great proteins, beef is currently the most desired.
Total beef exports are down 17.2 percent year-over-year for January through May. In the same time period, beef imports are up around 10 percent year-over-year.
High tariffs are the reason some countries can import beef into the U.S. and others don’t.
Uruguay and Brazil are high exporters of beef into the U.S., while Canada and Australia are low exporters. Mexico isn’t able to ship live cattle into the U.S., but the country is shipping beef products into the U.S. due to building more processing plants.
There isn’t any foreseen reason to see elevated beef prices go lower in the next few years.
Dennis Sun is the publisher of the Wyoming Livestock Roundup, a weekly agriculture newspaper available online and in print.
