Cattle Economics

This is Tim Hammerich of the Ag Information Network with your Farm of the Future Report.

Cattle prices have one of the few bright spots in the agricultural economy, with demand far outpacing supply in recent months. But some ranchers are concerned about the rising costs of raising cattle and the number of replacement heifers being retained. Idaho cattle rancher Glenn Elzinga says like any cattle rancher, he welcomes the good prices, but worries about what might come next.

Elzinga… “The problem is, you know, we're gonna, we're gonna, I'm looking around the valley where we live in a RA and a lot of people are now keeping heifers. There's heifer retention going on, and that's the first nail in the coffin of this high price. So it might take three or four years for it to correct, but it will correct with people retaining heifers. So that means that. Everything else has gone up. Tim equipment's gone up. Um, the maintenance of equipment has gone up. You know, just think of the tech and uh, you know, whether or not your John Deere dealer is gonna be able to affect change on a combine or change on a big tractor that's only a few years old because of the tech involved.Um, and then there's fuel, you know, fuel's actually stabilizing right now. But all the other costs like look at labor, it was just a few years ago I was paying. Good ranch hands, um, you know, I'd give 'em a beef and I'd give 'em $8 an hour and a place to live. They were happy and they were thinking, wow, we're coming out here. But now I pay a lot of my ranch hands, you know, in the twenties."

All of these costs add up to a future where cattle producers return to tight margins. Elzinga owns Alderspring Ranch in Central Idaho.