The calf and yearling markets continue to strengthen! Butcher cows and bulls are also seeing a little up in their respective markets, while bred cows are holding their own. With the U.S. cattle inventory so low, you would think that bred heifers and bred cows would be sky high! Our national cattle population was estimated close to 97 million head, which is quite a few less than just 20 years ago at 145 million!
In the last twenty years, our cattle herd has dropped by 40 million head, yet the world’s population has increased by who knows how many millions! There are many areas of the world that cannot afford beef, and of course, there are many countries in the world that are slowly opening their borders to American beef. When everyone finally decides to get along, we do not have near enough cattle to feed ourselves, let alone our export markets. It looks like the cattle industry has changed or is changing from a supply side industry to a demand market!
Even though our cattle numbers are lower, our beef production is higher, which somewhat offsets the lower numbers. It used to be a fat steer was finished and done at 1200 pounds, and the packers discounted extremely hard for 1300 or 1400 pound cattle! Today, if a fat steer doesn’t weigh 1300 pounds or better, or have 140 days on him he’s not considered done! All this makes for larger carcasses and more beef, but is it enough?
Beef has a lot of competition now that we didn’t before. The largest beef processor is owned by the largest hog company and hog production is at record levels! Chicken production is also setting records. A packing plant in Kansas, which processed close to 4,000 head of cattle a day, was recently closed. Economics aside, that’s over one million cattle a year that have to be hauled somewhere else, grown somewhere else and fed possibly somewhere else.
With droughts, less cattle, less packing capacity, more people, more demand and fewer people who know how to handle cattle, a person would think that the cattle business was on the verge of a huge breakthrough! High priced wheat, corn and soybeans has taken a whole lot of acres out of grazing, just to add to the mix! Looking at the futures board and all of the ingredients above, it sure looks like it should be a great market this coming spring and summer!
The wheat run is probably starting right now, and it may not last very long! With the price of wheat the way it is, there will probably be a lot of cattle come off before March 1st. Opportunity is knocking on our doors! We will have an outstanding selection of yearlings coming off of wheat here next week! Several sets of home raised cattle, and many of them carrying excellent condition! Please give us a call if we can be of any help to you. www.winterlivestock.com
Thank You
Weston Winter
