From the Field: Where’s the Beef?

From the Field is a bi-monthly column written by Mark Campbell, Farm Bureau Field Services Director for the Central District. He writes about Farm Bureau member benefits and County Farm Bureau activities.

I recently received the 25th Anniversary edition of Directions. Directions is a report that the National Cattlemen’s Beef Association (NCBA) publishes in their magazine to members. I always look forward to reading this report and viewing the rankings.

It should come as no surprise that there were some shifts in cattle production and numbers this year. The droughts of the past two years have placed significant pressure in cattle country, which is the center of the country to include the Midwest and Plains states. Although I will say, the Southeast contributes a significant number of cows to the US herd.

We all heard and saw pictures and video of the severe drought in 3/4ths of the country this summer. Even now, the drought still persists. Let’s not forget about the severe drought that brought Texas and Oklahoma to its knees last year. These two years of droughts have forced a lot of cattle to the market that would not have normally gone there. Some ranchers completely exited the beef business. Others sold part of their cow herd.

The one shinning spot in this were the record high prices for all classes of cattle and good exports. This has been good for the cow-calf producer; but not for the cattle feeders who have lost upwards of $250/head this year. Packers have not done much better as they have been forced to pay more for a limited supply of cattle. Higher input costs and land competition have also been challenges to the beef industry the past few years. Higher input costs such as diesel fuel hovering around $4.00/gal., and high fertilizer prices have led many cattlemen to skip a year or go with reduced amounts of fertilizer on the hay and pasture land.

While we have not seen the land competition between livestock and grain farmers as much on the East Coast; it has been very competitive in the Midwest. With the higher prices for corn and soybeans, cattlemen haven’t been able to compete on land rental rates with the grain guys. Cattlemen that I know in the Midwest and Plains have all talked about this as a big challenge to long term sustainability. Even here in my travels in central Virginia; I have seen corn and beans in fields that I would have never expected. Round-up ready crops and no-till drills add a lot of flexibility these days as to what one does with agriculture land.

Here are just a few highlights from the report. As of January 1, 2012, cattle numbers are down 2 percent, with the largest decline in region 4 which includes Texas, Oklahoma, and Arkansas. Virginia also had a decline. Lots of states had declines.

But some states actually saw an increase in their cattle numbers. Remember what I ssaid about the changing demographics? Nebraska had a huge jump this year of 250,000 cattle and calves. I heard that Nebraska experienced a large increase last year as well, where some cows were shipped from Texas and Oklahoma ranches to Nebraska where there was some grass to be found. Florida had an increase in cattle numbers. You may not think of Florida as being a large cattle state, but they are a major player. How about this? In the top 25 largest cow-calf operations in the country, 8 are in Florida with the largest having 42,000 cows and the smallest Florida ranch in the top 25 with 4,700 cows. Florida also ranks #10 in the number of beef cows per state. If you ever travel to Florida; take a drive into the central and southern parts of the state. You will see plenty of cattle and other agriculture enterprises and get a sight of what the native Floridians call the “Old Florida”.

Kentucky and Tennessee hold the 8 and 9 spots. Actually, these state rankings on beef cows haven’t changed much. But there is a consolidation taking place towards larger ranches with larger cowherds. The cattle feeding sector ranking has not changed much at all. The top 25 feeders are the same as last year. The big shift in the feeding sector has occurred with the smaller feedyards; primarily those with 5,000 head capacity and less. Most of the large feedyards are located in the High Plains of Nebraska, Colorado, Kansas, Texas, and Oklahoma. With the ethanol industry, the feeding sector in the Corn Belt areas such as western Iowa have seen a thriving group of feeders. These feeders have taken advantage of the ethanol industry by utilizing more economical co-products in feed rations to give them a competitive advantage. Plus they are still close to many of the packers in eastern Nebraska and western Iowa.

With cattle numbers low and beef demand high; the prospect for high prices into the future looks good, and cattlemen are optimistic. The grain prices will continue to play a significant factor in how cattle are raised, where they are grazed, and how they are fed and marketed. Obviously weather will always be a major factor. Let’s hope that all of us across the country enjoy good weather into the future with adequate precipitation for growing lots of grass. With plenty of forage, beef cattle have a nice advantage in being able to turn sunshine and grass into a wholesome, nutritiuos, and tasty beef.

Until next time,
Mark.

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