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Escalating costs for cattle transport explained by analyst

by Wyoming Livestock Roundup

Not everyone has what it takes to be a professional trucker – particularly a long-haul driver specializing in livestock transportation. It can be a dirty job. On top of this, the hours can be brutal. 

There’s also an extra measure of responsibility associated with transporting live, perishable cargo. 

Truckers are subject to a lot of rules and regulations, equipment and operating expenses are high. 

There are plenty of hassles, and few drivers get rich from pulling a bullrack.

Don Close, chief research and analytics officer for Terrain, discussed cattle hauling costs during the 2023 Cattle Industry Convention in New Orleans.

“I wouldn’t do what livestock haulers have to do for $5.50 per mile,” said Close. 

He reported to the National Cattlemen’s Beef Association Ag and Food Policy Committee, which delivers results from an analysis of cattle transportation economics.

According to Close, the committee asked him to do a deep dive to expose the real drivers of high cattle transportation costs, which have increased dramatically through the years.

Drivers of high transportation costs

Close looked back as far as 1980, when the average charge for livestock transportation was $1.25 per loaded mile. By the end of 2022, the average rate per loaded mile was $5.50. Many people naturally assumed high fuel costs were too blame.

“And they’re right,” said Close. “The increase in livestock transportation cost is highly correlated to the increase in diesel fuel prices.”

U.S. Energy Information Administration data for 1980 shows an average retail price of number two diesel at 82 cents per gallon. The average price for 2022 was $4.98. 

But, there are also other costs affecting livestock transportation rates.

“The cost of tires has doubled or more than doubled in recent years, from about $300 to $650 a piece. Insurance costs are through the roof, too, and most haulers have to carry at least $1 million in liability insurance,” Close said.

He added for large carrier companies, hired labor costs continue to increase, and the number of retiring drivers exceeds the number of available replacements. 

Additionally, many over-the-road drivers are opting for short-haul work. Consequently, many big fleet carriers have largely exited the business.

Costs related to animal value

“Everybody knows transportation costs are huge, but I don’t think we realized how many miles are involved or how the cost relates to animal value,” said Close, sharing numbers showing how cattle are hauled more and farther than ever before.

The miles add up, especially when considering distances involved with moving Florida calves to the Texas Panhandle, California cattle to the Pacific Northwest or Western feeders to the Plains. 

Close’s research suggests the typical calf sees an average haul of 700 miles. For a yearling, the average is 400 miles, and fed cattle going to slaughter travel an average of 150 miles.

“Collectively, with three ownership changes, the typical animal is transported 1,250 miles,” stated Close. “I think this is a conservative estimate.”

Percentage of load value

Close also looked at freight costs as a percentage of load value. When considering a pot load of calves weighing 48,000 pounds, transportation costs represent 2.7 percent of load value, accounting for eight dollars per hundredweight (cwt). 

For a load of yearlings, freight costs are two percent of load value and account for more than four dollars per cwt. For fed cattle, the numbers are 97 percent and one dollar per cwt, respectively.

“When we add it all up over an animal’s lifetime, there are $14 per cwt in freight costs,” said Close.

These costs affect every cattle producer, in Close’s opinion, even guys who haul calves to the sale barn in their own gooseneck trailers. They may think theyʼre escaping high transportation costs, but Close says they couldn’t be more wrong.

“The buyers know how to calculate freight, and it’s figured into what they’re willing to bid,” he explained. “So, everyone is affected.”

Troy Smith is a freelance writer and cattleman from Sargent, Neb. This article was originally published in the Angus Beef Bulletin Extra on Feb. 22.

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