A lot of what’s going on in the beef industry is all related to what the drought was or is in Texas and the western part of the U.S.
Although cow/calf prices have remained high, beef producers still face challenges to make those prices translate to more profit for their operations. Ron Gill is a professor and livestock specialist for Texas A&M Agrilife Extension.
“Calf prices are at historical highs. Cow prices are at historical highs, and so right now the value side of it is excellent. The problem is, we’re still running thirty per cent less cows on the same amount of land that’s costing the same amount of money or more to run them, and so the cost side has escalated a lot more than most people think about. We’re all enamored with that high priced calf, but we really still have to control the cost side of our production, or we won’t be making any more money.”
Gill says a good year for crop production should decrease some input costs.
“They’ve had a really good year in the Midwest, corn, predicted to have one of the largest corn crops. Texas has done really good in the crop production. So we’re expecting to see feed prices lower. We already see corn quite a bit cheaper. Soybeans are going cheaper. There’s a bumper cotton crop coming, so oil seed and cotton seed meal should be cheaper. So that’s the first time in a long time that protein costs have had a chance to go down. So we’re looking at things that may actually lower our costs of supplementation.”
The prices on some inputs remain high.
“The thing that’s still pretty high is our fertilizer, trying to get adequate growth out of our introduced grasses. The other thing that’s starting to happen now, between grass hoppers and army worms, we’re losing a lot of grass to those. They’re coming in and just taking the tops out of our grass.”
Mother Nature always kicks in a few challenges of her own.