Drought and Retail Prices Bury Producer Profits

On the heels of a record-setting end-of-year snowpack, California expects yet another drought year… which drove many cattle producers to cull their herds due to limited feed supply. California Cattlewomen’s past President Sheila Bowen says producers had to sacrifice… with little reward.

“They’re good stewards and they know when to make that tough decision to cull the herd. So consequently, we know the prices were high in the grocery stores, but…those prices were not trickling down to the rancher. Last year our prices were lower than they had been in years.”

USDA data shows beef retail prices increased more than 20 percent from the beginning of 2020 to 2021… while the industry saw disruptions like COVID, the packing plant fire, and drought.

CattleFax’s Kevin Good says producers could see a bigger check in the future, as they gain leverage with shorter supply.

“Now if we look at this year and probably next year you more than likely pushed retail as stout as you can short-term… so we would envision those prices to be flatter, at the same time as you get into tighter supplies, the cattle producer gets a bigger piece of the pie. He just gains leverage compared to the packing segment.”