High prices that beef calves are bringing at the sale barns are welcomed by ranchers, but those prices don’t automatically translate to good news for the beef industry as a whole.
Pete Scarmardo is a local rancher and cattle buyer.
“In our area now the cow and calf producer is doing fairly well, but of course you’ve got to remember that his input costs, with it being a dry summer, that he maybe spent a little more money this year on feed and care. Fertilizer costs are still high. His input costs are still high.
When you get to the bottom line, it still may not be as good as everybody thinks that it is, but it’s better than it’s been in a long time.”
Scarmardo says that while high calf prices are good for producers, the low cattle numbers helping to drive those prices create challenges for the beef industry’s infrastructure.
“In our part of the world right now, with fewer cattle numbers, we’re seeing the feed companies sell less feed because we’ve got less cows. The livestock auction markets are not selling the numbers they were because there’s less here to handle. The trucking companies that move them all are handling less cattle because there’s not as many to move.”
Ranchers wanting to buy replacement females are finding that trying to increase the size of their herds in the current environment is an expensive proposition.
“The people that are buying them and raising them have to give more for them because there’s not as many out there to pick from to buy. The feed yards are having to be more aggressive buying the feeder cattle. There’s not as many of them, the feeder cattle, out there for them to buy. The whole chain is having to be more aggressive to take an inventory, and more efficient with the inventory that they have, to be able to make sure that even with high cattle prices, they can still be profitable.”