Tough It Out
As we get closer to the Fourth of July, those in agriculture are watching calf and yearling cattle, lamb, hay and grain prices.
Those in the livestock or farming business, and their bankers, are trying to figure out if the cost of raising these cattle and lambs is starting to outgrow the prices we hope to receive this fall. We all start shaking the dice this time of the year.
Cows and bulls at the local auctions keep going up, but are they meeting the price of inputs? Inputs such as inflation-driven fuels, fertilizer, pickups and every day needs are rising. Will the prices for lambs, calves and yearlings overcome the high prices of inputs?
As we complain, we do have to realize, in our region, we can raise calves and lambs cheaper than other areas in the country. Our land taxes and the costs of ranching are cheaper here.
We don’t need to fertilize our summer grazing lands like they do in the eastern and southern parts of the U.S. With their smaller herds, the cost of raising an animal goes up quite a bit.
I always thought prices at this time of the year gave a pretty good indication of prices this fall. In the last few years, especially with calves and yearlings, the prices started on a downward slide. But this year, it could be going in the opposite direction.
The reason I’m saying this is, demand for beef is growing and cattle numbers are declining. Both are expected to continue these patterns for the year. With the demand for hamburger growing, the U.S. is importing a lot of cattle as the packers need the lean beef to go with the extra fat our fat cattle are producing right now.
With high inflation and the threat of a recession a factor, these unknowns could really hurt us. Unknowns are hard to plan around. The biggest unknown out there is what the White House is going to do next.
They need to stop blaming others for our problems and find practical solutions to get America out of this mess. We sure don’t need a national handout now. While $2,000 was nice to receive, we are paying for it now.
A big positive now is the Ocean Shipping Reform Act of 2022 was signed into law on June 16. The Agriculture Transportation Coalition estimates 22 percent of U.S. agricultural exports in 2021 were not delivered because of unreasonable shipping practices. This law will address challenges at the ports, including aging infrastructure and shipping issues leading to excessive detention, demurrage fees and declined or canceled shipments.
The U.S. Meat Export Federation President and CEO Dan Halstrom says of the timeliness of the bill, “In these times of rising input costs, it has never been more important to maximize the value of our agricultural products, and the best way to do that now is to ensure access to the international marketplace. This legislation takes important steps forward in improving the shipping services available to U.S. exporters.”
In times like this, we’ll take any positives.