High demand, high market: Low cattle numbers spur price increases
Markets this spring are exceptionally high, causing a number of producers across Wyoming to question whether to sell or keep their yearlings, lambs or pairs.
“Numbers are short and beef sales are up as the economy rebounds. All proteins are up and all proteins are in short supply,” explains Worland Livestock Auction owner Jim Newby.
Torrington Livestock Auction owner Lex Madden has heard female numbers nationwide are the lowest they’ve been since the 1950s. While the National Agricultural Statistics Servce (NASS) shows cows and heifers that calved as of Jan. 1 are at their lowest level in Wyoming since 1992, a steady decline in total females that calved has occurred since 2002.
“We’ve had pretty good moisture nationwide this spring. Reservoirs and streams are up and people may not be thinking drought this year. With that mindset and the high prices, people may decide to buy more females and pairs or retain more heifers this year versus last year,” comments Madden.
“In my area fewer females are going to be bred this year than last. I don’t know if it’s like that everywhere, but because prices were so high several ranchers sold their heifers. After a couple bad years they took advantage of the good prices and paid off some debt,” adds Newby.
Madden adds that in recent weeks 600 to 650 weight heifers have brought between a $1.15 and a $1.24 in Torrington.
The high prices aren’t limited to heifers and pairs. Stocker cows and bulls are also high, and Madden gives partial credit to the excellent demand for hamburger to the economy.
“We recently sold a bull for 89 cents a pound. Nationwide you see a tougher economy and people are changing their eating habits. They are switching to more hamburger they can feed their family at home, rather than going out to a medium class restaurant to eat. It’s a sign of the times. People still have to feed their families, but they are feeding them on cheaper recipes and meals,” explains Madden.
Newby adds that packers are set up to kill a set number of cattle daily and they’re having to fight to get those numbers right now. With packer cow and bull numbers down, sale prices are up.
Another facet of the industry that’s benefitting from the high markets are feeders, who have suffered sometimes astronomical losses over the past couple of years.
“Obviously the feedlots are making some money right now, which is a good thing. They needed that after the huge losses in 2008 and 2009. Some people were losing as much as $400 per head on fats and that trickles down to the rancher and leads to lower prices all the way down to calves,” says Madden.
“Fats were at 84 cents in December and now they’re at 98 cents to a $1.02. That’s a huge advantage in the fat cattle prices,” adds Newby.
He adds the spring prices aren’t changing how people are managing purchased cattle this year.
“There might be some heavier yearlings turned out to grass this year, but that’s more due to a lack of supply. There aren’t enough cattle to cover the grass we have here this year. A lot of pastures will go empty this year.
“It’s just part of the cycle. People sold down and sold down and now we have a wet year with ample feed supply and there aren’t enough cattle. Numbers are down and feed production is up, and that’s opposite of how it was a few years ago,” states Newby.
Producers who were able to retain ownership are sitting pretty this spring, notes Madden. In recent weeks Torrington Livestock has sold 400-pound steer calves for $1.60 per pound, 500-weight steers for as much as $1.45 and a set of 750-pound steers for $1.19.
“It’s not fun to go to work, regardless of your job, when everyone is losing money. When people are making money, in any industry, it’s much more fun. People are happier, less stressed and they put more money into circulation and boost the local economy. It’s certainly better for everyone’s attitude. It’s a lot of fun to go to work right now,” says Madden.
Heather Hamilton is editor of the Wyoming Livestock Roundup and can be reached at firstname.lastname@example.org.