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Tight Beef Cattle Supplies Push Prices to 10-Year High

By Ms. Susan M. Collins-Smith

Beef cattle prices are the best they have been in nearly a decade for Mississippi’s producers, but they face some tough management challenges to ensure their operations are profitable.

“Producers are encouraged by high cattle prices and seem optimistic going into 2024,” said Brandi Karisch, beef cattle specialist with the Mississippi State University Extension Service. “However, these high prices may be offset by inflation, the high cost of inputs and costs associated with drought recovery.”

A tight supply is pushing prices up for calves, cows and replacement heifers. Calves in Mississippi are selling for nearly $3 per pound depending on weight. Cow and replacement heifer prices are also very strong, said MSU Extension agricultural economist Josh Maples.

The tight supply in 2024 is partly a result of producers reducing their herds as drought conditions worsened throughout 2023.

“Many producers are recovering from the severe drought that hit the state last year, decimating pastures and ponds used as water sources,” said Karisch, who is also a research professor in the MSU Department of Animal and Dairy Sciences. “The extremely dry conditions caused a decline in cattle numbers that we see reflected in the early January 2024 inventory numbers.”

The state’s total cattle inventory as of January 2024 was 810,000, including 424,000 beef cattle and 81,000 beef replacement heifers. Total cattle inventory is down 5%, or 40,000 head, from 2023, according to the annual cattle report by the U.S. Department of Agriculture’s National Agricultural Statistics Service.

While the state has received ample rainfall this year to move the state out of drought status, many pastures and hay fields will need time and proper care to recover. In the meantime, hay may be hard to find this year, said MSU Extension forage specialist Rocky Lemus.

The state typically produces 650,000 acres of hay each year. Lemus said he expects hay acreage in 2024 to total between 590,000 and 600,000.

“We’ll also have some loss of grass stands in pastures after last year,” he said. “In drought conditions, we begin to lose the grass, and weeds come in and fill the gaps. So, you have to make the right management decisions to recover those fields.”

That includes decisions about what grasses to plant, when to graze, how many animals to graze and when to apply fertilizers.

“Most perennial warm-season grasses need a recovery period after drought,” said Lemus, who is also a research professor in the MSU Department of Plant and Soil Sciences. “One thing people can do to minimize the impact of future droughts is integrate summer annual grasses. But I always encourage producers to do a soil sample before they make any decisions about renovation. If you don’t know the nutrient levels of your soil, what you plant may fail.”

Attention to soil fertility and a sound rotational grazing plan are just as important in years without drought.

“Drought impact depends on how pastures have been treated in the years before the drought,” Lemus said. “Grazing management decisions after drought cannot be separated from the usual pasture management requirements. A grazing plan based on forage species, pasture condition and stocking rate requirements should be developed as part of the farm’s management plan. Other factors, such as pasture quality and feed and mineral supplement considerations, need to be addressed, too.”

The current economic environment is good for those who want to raise cattle, Maples said.

“Whether or not it will make sense for someone to purchase beef cattle right now, or anytime, will largely depend on their pasture and forage setup,” he said. “For someone who has available pasture with good quality forage, this market is offering opportunities to make money. But managing costs will be a big determinant of profitability.”

Locally grown beef continues to be a popular segment of the industry in Mississippi as more processing options have become available in the state.

“This industry segment certainly has opportunities but requires a producer to find, develop and maintain marketing channels for their products,” Maples said. “This includes the less popular cuts of meat that are harder to sell. Producers who build these connections can do well, but it is not easy.

“The more well-established traditional markets of selling beef cattle calves or yearlings are easier to get into, but producers should expect market swings. With a good risk management plan, producers can better manage those swings. In Mississippi, many producers do both, but the type of cattle and available forage are also important when deciding to go this route,” Maples continued.

Karisch said Extension specialists field numerous calls and emails about expanding their operations to include locally grown beef. In fact, it is so popular that researchers with the university recently conducted a research project to study alternative methods for finishing cattle in Mississippi.

“Many producers do not have the labor or resources to finish cattle in a traditional way, and this study examined whether we could limit feed cattle on a pasture diet to a few simple ingredients and still obtain comparable gains and carcass quality compared to more traditional finishing diets.”

Results of the study will be available for producers later this year.

Source : msstate.edu

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