Fed cattle prices reach ‘unprecedented’ highs during drought
KAY LEDBETTER/Texas AgriLife Extension Service
Though seasonal ups and downs are to be expected, fed-cattle prices are being driven to unprecedented levels by several factors this year, said Dr. David Anderson, Texas AgriLife Extension Service livestock economist.
AgriLife Extension ServiceNovember 23, 2011 3,180 views Post a comment
By Robert Burns
Fueled by declining beef production due to the drought and booming exports, fed-cattle prices soared to “unprecedented” levels, according to a Texas AgriLife Extension Service expert.
Fed cattle prices were $127 per hundredweight last week, said Dr. David Anderson, AgriLife Extension livestock economist. In comparison, they were $113 per hundredweight two months ago.
“Fed-cattle prices” typically refers to the price of live cattle coming out of feedlots after being fattened on rations consisting largely of grain.
Last year at this time, the price per hundredweight was about $98, with an average of about $95 for 2010, Anderson said.
Though the seasonal ups and downs are to be expected, the prices are being driven to unprecedented levels by several factors, he said.
First, though the Texas corn crop was largely a failure due to the drought, the harvest was good in the Corn Belt, which cheapened feed, Anderson said. Another factor is increased demands in overseas markets.
But the big factor is the drought, and the effect it had as livestock producers were forced to aggressively cull herds, send calves to market early, or, in many cases, liquidate entire herds because of lack of grazing, hay, or water -- or a combination of all three, he said.
“Earlier in the year, as we really pushed large numbers of cattle through as the drought got worse and worse, we forced a lot of calves to market early, and we did see price declines across the board,” Anderson said.
This means the calves that normally would have been held and sold in Texas and Oklahoma this fall are already long gone because they were moved out earlier in the summer, which makes supplies weak and drives prices up, he said.
“If you had to sell a few months ago, that’s not much consolation, but I think it is a positive thing overall,” Anderson said.
Robert Burns has nearly 30 years’ experience writing about agriculture and agricultural-related research and works with the Texas AgriLife Extension Service.