Strong Prices for Beef Producers

Strong Prices for Beef Producers

I’m KayDee Gilkey with the Northwest Farm and Ranch Report.

Quarterly Northwest Farm Credit Services releases brief summaries of the production, supply, demand and prices of 13 different commodities. In today’s report we will be discussing the beef market.

Northwest Farm Credit Services VP-Market Research and Development Michael Stolp shares an overview for beef cattle.

Stolp: “Cattle prices remain at historic levels really due to reduce numbers and strong global demand. In fact, recent auction results from the Northwest revealed that cattle prices have increased 30 percent year over year. Profitability remains positive for cow-calf and stocker operations but feedlot profit margins are struggling challenged by higher feeder cattle prices and volatility in the cost of gains. Additionally drought conditions in the US Southern Plains continue to drive the size of the nation’s cattle herds lower as producers look to match cow numbers with available forage.”

Other highlights shared in the Snapshot included that producers throughout the Northwest have begun contracting the 2012 calf crop. The Superior Livestock Auction video sale held in early June saw record prices. Several factors will influence the beef market going forward, including the short supply of domestic cattle, foreign trade activity, tight domestic supplies of competing proteins, global economic credit problems, continued high unemployment, and the health of the domestic economy.

Strong prices have improved many producers’ bottom lines, and 2012 should be another profitable year for cow/calf producers.

I’m KayDee Gilkey with the Northwest Farm and Ranch Report on the Northwest Ag Information Network.