Today we begin coverage of Cattle Industry Summer Conference in Denver, Colo. In covering the meeting, Radio Oklahoma Network Farm News Director Ron Hays interviewed Texas Cattle Feeders Association President & CEO Ross Wilson about on the condition of the state of the feedlot business in the southern plains. Wilson says they are thankful for the rise in cattle and beef prices, which has improved profitability for producers in the Lone Star state.
"We are so thankful and have been blessed these last several months to have gotten back into black ink," Wilson said. "Up until Q4 of last year there were a number of months where most of those were red and some of them were very red."
Wilson's comments are featured on today's Beef Buzz. Click on the LISTEN Bar at the bottom of this story. With record cattle and beef prices across the board, he said that creates concern for the impact onto beef demand.
"At some point and time you scratch your head as to what the consumers response might be," Wilson said. "But both domestically and internationally we have been very fortunate that demand has maintained at a very strong level."
The latest cattle on feed report continues to show the nation's cattle supply continues to shrink. Wilson said that has impacted their members.
"I will be honest with you it's been difficult," Wilson said. "We've seen a few feed yards close, we have seen some yards change hands, be purchased by other feeders that had one or two yards."
While this industry started as a custom cattle feeding business, a lot has changed. Wilson said custom feeders still exist but not to the extent they did 10 or 15 years ago. He said
now more than ever more feedlots are owning the vast majority of the cattle they are feeding.
"Just the amount of capital to operate these feedyards is mind boggling," Wilson said. "We're talking about hundreds of millions of dollars of lines of credit to purchase the cattle and purchase the feed stuffs to go into the rations."
"Let's face it at these today's price levels, you can't expect a lot of people to retain ownership when they can sell those calves or those stocker animals for what they can sell them for and not have that additional risk and market fluctuations that comes as they put those cattle on feed more another six months," he said.
Wilson said he knows the markets will change. With rain returning to the southwestern US and other parts of the country, heifers are being retained and there is rebuilding of the US cowherd.
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