U.S. beef producers have sent more breeds to barns for sale, some have completely liquidated herds, and analysts say that beef prices that are already soaring will be even more in the not too distant future. It shows a tendency to be higher. According to the latest report of U.S. Department of Agriculture cattle, the market has shrunk to levels not seen in recent years, and total inventories have decreased by 2% since July 2021 for him to 98.8 million heads. became. But it’s not just the decline in cattle as a whole that is worrisome. It is sent to slaughter. In addition to the normally edible steers, calf-producing cows are being sold for processing significantly. “We are seeing large numbers of female stock have been placed in feedlots,” USDA livestock analyst Shayle Shagam said in a radio report for the agency Tuesday.
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The number of females in feedlots is up 3%, and existing herds are down roughly 2.7% from a year ago. Shagam said that combination means “supplies of cattle going to feedlots is going to be declining,” resulting in “progressively tighter supplies of all fed cattle available for slaughter as we move into 2023.” With the price of ground beef up 9.7% in June from the same month a year ago, the ongoing decrease in supply could cause prices to surge even further than earlier estimates. The USDA’s previous price forecast projected average steer prices would be up nearly 8.5% next year, prior to the storm of conditions causing increasing headaches for producers.
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Sky-high input prices coupled with ongoing drought conditions in much of the country are exacerbating the sell-offs. Colin Woodall, CEO of the National Cattleman’s Beef Association, said this year’s drought was more than past regional droughts that allowed cattle to graze elsewhere in the country until it began to rain again. It states that it is widespread.However, most of the country is in a drought state. “We expect prices to continue to rise, but everyone needs to remember that it wasn’t the rancher who set the price. ” Cost is everything. Bringing livestock to market Looking at those who choose to reduce their herds or eliminate livestock altogether, it is always due to increased input costs. And it’s all about feed costs, hay costs, tractor diesel costs, truck diesel costs, fertilizer costs, and more. Increasing the number of cattle and heifers sold for slaughter means that the number of cattle will decrease and it will take years. Everyone is having a hard time finding the feed they need for their livestock, “Woodall told the FOX business.
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“Heifers are two years old before they give birth to their first baby,” explains John Kleivoker, a seed (breeding stock) business in Missouri, California. “Then the calf is only 18 months old, which means almost 40 months from when this little heifer is born to when it produces a pound of beef.”Over the past five years, he has been on the same He said he purchased 110 to 120 large round bales of first cut hay from a supplier. Only 57 he was produced in the first cut that year, but the cost increased by 50% from last year to $75 per bale. There was no second cut due to the drought. Now he’s hoping the rain will bring his trademark third cut. Meanwhile, he has to buy hay elsewhere. “We can get hay, but with freight it can be prohibitively expensive to ship 200 to 250 miles south,” Klieboeker told FOX Business. . “The cheapest price we can find is $5.05 to $6 per mile. Add another $1,000 to $1,200 for 30 bales of hay and it quickly becomes very expensive.”
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Source: Fox News
