Oldtimer
09-17-2003, 08:44 AM
By Pam Easton
Associated Press
September 16, 2003
HOUSTON — Cattle prices are soaring to levels not seen in at least a decade after herds were trimmed due to drought, demand grew and a mad cow disease outbreak in Canada combined to mean more bucks for the beef.
"We just kind of pinch ourselves each day," Matt Brockman, executive vice president of the Fort Worth-based Texas and Southwestern Cattle Raisers, said of the high prices after nearly a decade of depressed prices, decreased demand and drought. "It certainly is a welcome reprieve."
Brockman said the drought and previously low prices caused Texas cattle raisers to liquidate their herds and even forced some to leave the business. The first signs of improvement came last year, when the drought eased, demand grew and prices began to climb, he said.
"We don’t get into droughts overnight, and we certainly don’t recover from them overnight," Brockman said, noting the drought still continues to affect some ranchers in far West Texas.
Ranchers still struggling with drought "can’t take advantage of these higher prices right now because there are limitations on their ability to increase production," unlike ranchers in areas of Texas where the drought has lessened, allowing cattle raisers to restock and begin to take advantage the improved market, Brockman said.
Ernie Davis, a livestock marketing economist with the Texas Cooperative Extension, said cattle ranchers who endured years of drought are "making money right now."
"We’ve worked our way into one of the best markets that I’ve seen in my 40 years of livestock marketing," Davis said.
Last week, slaughter steers averaged $84.94, 33 percent higher than 2002. The highest price on record, according to Texas A&M University, is $85.38 during the week of March 27, 1993.
"We will probably beat that record in the next week or so," said Davis, who said the high prices are fueled by a lack of supply and thinner cattle being taken to the slaughterhouse to meet demand.
There have been no signs of herd expansion this year, said Davis, who says a case of mad cow disease in Canada earlier this year closed U.S. imports of fresh beef and live cattle and assisted in boosting beef prices.
"When Canada closed its doors, everybody else closed their doors to Canada, and our exports jumped because we picked up those customers," he said. "We are producing less, getting less in, and shipping more out."
Davis said he expect prices to remain in the mid- to low-80s for the near future, but it isn’t clear how long the high prices will last.
"The prices are so high, so variable, it’s hard to call," he said. "I can’t ever remember sitting in September talking about an outlook that looks this positive or strong."
Texas Agriculture Commissioner Susan Combs said the price increase is great for Texas, where 15.5 million head of cattle makes it the top cattle state in the country.
"It means money in the hands of our producers, which is very positive in an economy that has taken a downturn," she said. "I think a big chunk of the high price base is due to Canada. When the Canadian situation changes, the price situation will change."
Combs said in the meantime, those in Texas’ cattle industry are happy, but "know this is not going to be permanent."
"We love the good times, but it is pretty bad in the bad times," she said.
Jim Gill, market director for Texas Cattle Feeders Association in Amarillo, said the situation is bittersweet for many.
"Right now, we are seeing all the sweet side of it. The bitter side of it is you have to go back and buy feeder cattle at those prices," he said, adding the increased prices will eventually be reflected in grocery stores, where consumers will have the final say.
"The price of anything doesn’t go up forever," he said. "You just don’t know where that point is."
Associated Press
September 16, 2003
HOUSTON — Cattle prices are soaring to levels not seen in at least a decade after herds were trimmed due to drought, demand grew and a mad cow disease outbreak in Canada combined to mean more bucks for the beef.
"We just kind of pinch ourselves each day," Matt Brockman, executive vice president of the Fort Worth-based Texas and Southwestern Cattle Raisers, said of the high prices after nearly a decade of depressed prices, decreased demand and drought. "It certainly is a welcome reprieve."
Brockman said the drought and previously low prices caused Texas cattle raisers to liquidate their herds and even forced some to leave the business. The first signs of improvement came last year, when the drought eased, demand grew and prices began to climb, he said.
"We don’t get into droughts overnight, and we certainly don’t recover from them overnight," Brockman said, noting the drought still continues to affect some ranchers in far West Texas.
Ranchers still struggling with drought "can’t take advantage of these higher prices right now because there are limitations on their ability to increase production," unlike ranchers in areas of Texas where the drought has lessened, allowing cattle raisers to restock and begin to take advantage the improved market, Brockman said.
Ernie Davis, a livestock marketing economist with the Texas Cooperative Extension, said cattle ranchers who endured years of drought are "making money right now."
"We’ve worked our way into one of the best markets that I’ve seen in my 40 years of livestock marketing," Davis said.
Last week, slaughter steers averaged $84.94, 33 percent higher than 2002. The highest price on record, according to Texas A&M University, is $85.38 during the week of March 27, 1993.
"We will probably beat that record in the next week or so," said Davis, who said the high prices are fueled by a lack of supply and thinner cattle being taken to the slaughterhouse to meet demand.
There have been no signs of herd expansion this year, said Davis, who says a case of mad cow disease in Canada earlier this year closed U.S. imports of fresh beef and live cattle and assisted in boosting beef prices.
"When Canada closed its doors, everybody else closed their doors to Canada, and our exports jumped because we picked up those customers," he said. "We are producing less, getting less in, and shipping more out."
Davis said he expect prices to remain in the mid- to low-80s for the near future, but it isn’t clear how long the high prices will last.
"The prices are so high, so variable, it’s hard to call," he said. "I can’t ever remember sitting in September talking about an outlook that looks this positive or strong."
Texas Agriculture Commissioner Susan Combs said the price increase is great for Texas, where 15.5 million head of cattle makes it the top cattle state in the country.
"It means money in the hands of our producers, which is very positive in an economy that has taken a downturn," she said. "I think a big chunk of the high price base is due to Canada. When the Canadian situation changes, the price situation will change."
Combs said in the meantime, those in Texas’ cattle industry are happy, but "know this is not going to be permanent."
"We love the good times, but it is pretty bad in the bad times," she said.
Jim Gill, market director for Texas Cattle Feeders Association in Amarillo, said the situation is bittersweet for many.
"Right now, we are seeing all the sweet side of it. The bitter side of it is you have to go back and buy feeder cattle at those prices," he said, adding the increased prices will eventually be reflected in grocery stores, where consumers will have the final say.
"The price of anything doesn’t go up forever," he said. "You just don’t know where that point is."