Cattle farmers enjoying improved prices
SARCOXIE, Mo. (AP)--Derek Paradeis was smiling at the price he got for a cow and a calf he culled from his family's herd at Sarcoxie.
"Prices are good,'' he said in early June as he left the Joplin Regional Stockyards, the second busiest stockyard in the U.S. after Oklahoma City. "It's a good time to cull.
"When prices are like this, you might as well sell them right now. There's a lot of upkeep and supplies with keeping a cow that could be culled. We're just trying to keep our heads above water, and this helps.''
As Paradeis was selling, Chris Byerly was buying at the cow-calf sale that drew about 75 people.
"I have bought 20 so far,'' he said. "Might get 40, 50 or 60,'' he said. "The market is good. We're off our highs, but it is still good. Demand is good.''
Byerly, a Jasper County farmer, said, "It's leveling off now, but it's a lot like the stock market. You get big swings just like they do in the stock market.''
Eldon Cole, a cattle expert with the University of Missouri Extension Center in Mount Vernon, said, "The local cattle business has been in the doldrums for the last three years. We had been told that our situation was not going to change until the world and national economy got better. We were told not to expect any relief until 2012 or 2013 for better consumption of beef.
"The first part of 2010 changed that. There's been a run-up in cattle prices. Farmers are starting to smile because they are starting to make money. Culled-cow prices went through the roof.
"The reason that has been given for this is some improvement in the nation's attitude about the economy. We have such a low number of cattle in feedlots and the cow inventory is down. It's causing us to get some relief now that we thought would be two years down the road. We weren't expecting it.''
Feed cattle are a good barometer of what's happened to the market. After the January run-up, beef prices were approaching a $1 a pound when they had been closer to 80 cents a pound. It's now about 90 cents a pound, Cole said.
The beef-cow numbers, he said, have declined from five to 10 percent.
"We've got lean,'' he said. "We're way down in our cattle inventory. If you don't have cows, you don't have near the production of beef.''
Cows are an expensive thing to keep around. They cost about $500 to $700 a year to maintain. Calves cost $500 a year or less.
"It's not a profitable situation when demand is down,'' Cole said. "Buying cattle can be a risky business. But this is going to be an OK year that's better than last year, but we're still in tough economic times.''
That aside, local cattlemen have an optimistic picture of what's coming down the road.
"The pastures are in good shape,'' Cole said. "Forage conditions have been good. They have raised a lot of hay so far to fill barns that were emptied after last winter. It's green grass and new calves right now. It's an optimistic picture.''
The downturn in the economy, he said, changed consumer appetites.
"We're more of a hamburger society now,'' Cole said. "We're selling a lot of bologna and hot dogs. People are not buying the high-priced cuts. They want more money in their pockets.''
Ron Plain, a state agricultural economist, said, "We're having a much better year in 2010 than in 2009. Prices are not records, but they are very good. We've past the spring peak in prices. They always drop a little when we get into the heat of summer.''
Plain said the upturn stems from fewer cattle and an increase in demand.
"In the first quarter of this year, beef exports were up 25 percent when compared to a year ago, and beef imports were down 19 percent,'' Plain said. "That's a big part of what has caused such a dramatic change.''
Plain said Missouri is a cow-calf state, producing two million calves a year. About 10 percent of all U.S. beef gets exported.
"We've been downsizing for four years now,'' he said. "That's put us in a better position for 2011. The numbers are going in our favor after the tough recession years of 2008 and 2009.
"What's done well are hot dogs, ground beef and bologna. What has not done well are the strip steaks and rib-eyes. People were unwilling to pay extra for the good stuff. But those quality beef cuts will go up. We think it's just a matter of time.''