Cattle selling at all-time high prices, due in part to Asian demandSouth Dakota cattle prices are at a historic high, according to a U.S. Department of Agriculture official.
By: Tom Lawrence, The Daily Republic
South Dakota cattle prices are at a historic high, according to a U.S. Department of Agriculture official.
“This is it,” said Justin Lumpkin, the officer in charge of the USDA-South Dakota Department of Agriculture Market News. “We’re experiencing historic highs this year, all-time historic highs.”
A 1,300-pound feeder cow ready for slaughter can bring up to $1,600 right now, he said.
Marion Rus, co-owner of Mitchell Livestock Auction, said the current price for fed cattle is higher than the previ- ous mark set in 2003.
He said a fat, feed-lot-finished steer weighing 1,300 pounds would bring about $1.21 per pound, or $1,573.
“It’s a good price,” said Rus, who has been in the cattle business for 35 years. “The big reason would be export and lighter numbers of fed cattle.”
South Dakota Secretary of Agriculture Walt Bones said the price is being driven by the demand from overseas. That increases the price of a cow $125 per head, Bones said.
“Our export demand has been excellent,” he said.
Bones, who was in China last month, said it’s readily apparent that American beef remains in high demand.
“Those Asian countries, more and more of their folks are moving into the middle class, and they want to eat beef and pork and foods with more protein,” he said.
Cattle producer Dvonne Hansen, who operates a cow-calf operation 6.5 miles north of Mitchell, agrees.
“I’ve never seen cattle as high as they are right now,” Hansen said Monday afternoon.
She has about 100 cow-calf pairs. They are Angus-Hereford cross and are more valuable than they have been since she started working on her farm in 1964. Hansen, 77, grew up on a cattle farm.
Mitchell Livestock Auction will hold two sales this week. On Wednesday, 1,000 to 1,500 head will be sold, and 4,000 feeder cattle will be sold on Thursday.
According to the USDA’s South Dakota Weekly Auction Summary for the week ending Sunday, 42,116 cattle were sold at auctions in Fort Pierre, Herreid, Hub City, Mobridge, Philip and Sioux Falls.
That’s compared to 30,639 the previous week and 49,181 at the same time last year, when high prices were also reported.
Cattle futures — the price buyers are willing to pay now for cattle ready for market in a few months — are high as well.
“It’s a great time to be in the cattle business,” Lumpkin said.
Lumpkin said it seems like a strange time for such high cattle prices, with the country in an economic slump and a high unemployment rate.
But he said other countries have increased their demand for better cuts of beef.
“China and (South) Korea are seeing their standard of living increase,” Lumpkin said. “Now they’ve got the money to buy those. And our exports have been strong due to our weak dollar.”
There is another factor, he said, as drought-stricken cattle producers in the South are dumping their cattle into the market to take advantage of the high price of beef and escape the rising cost of feeding cattle.
“The southern drought has pushed the market,” Lumpkin said. “There’s no grass available and hay is becoming very valuable.”
He said cattle prices should remain high.
“The prospect remains really good for tight cattle numbers in the future,” Lumpkin said. “Very limited supply.”
These record prices are driving a lot of cattle to market, and Rus said the South Dakota cattle count is down.
“We are short,” he said.
Producers need to hold on to their heifers to produce more calves, Rus said. It’s an investment in the future that needs to be made even when prices are at a record high.
“Expanding a herd still takes money,” Lumpkin noted.
Hansen said people get confused by the idea that high cattle prices mean pure profit for producers.
“Pasture rent is higher, the vet bill is higher, hay is higher, equipment is higher,” she said.
She grows hay but said she usually has to buy it to feed her herd. Hansen hasn’t sold any cattle recently and has no plan to sell off all or most of her cattle. She said it’s important to hold on to cattle and maintain a herd for next year and the year after.
Hansen said another reason for the diminishing herd is the fact that more South Dakota pasture is being converted into cropland. A projection at the start of the year said the state would have the secondlargest number of acres dedicated to corn, trailing only 1931.
“We need to get the value of those cows high enough so we can compete with corn and soybeans,” Bones said.
Bones said despite all the good news, there remains a need for beef processing plants in South Dakota.
Gary Taylor, a South Dakota State University agriculture economist, did a study of the annual economic impact per species in the state, Bone said.
A dairy cow, with the feed it eats, the milk it produces and, in the end, the meat it becomes, and with the people employed to care for it, the truckers who transport its milk, has an impact on the state of $13,594.
A sow is worth $6,400 to the state once everyone involved gets a cut, Bones said.
A beef cow is worth $1,700, primarily because there is almost no processing in South Dakota, he said.
Another aspect of the record prices is the future. Bones said the rising beef market may encourage some younger people to enter the cattle production business, since they would only need a small amount of land and would have access to numerous affordable feed options.
“This might be a good opportunity get some younger people involved with agriculture,” he said. “Our farmer population is getting a little older.”
Dvonne Hansen, 77, sorts cattle Monday afternoon on her farm 6.5 miles north of Mitchell. She said cattle prices are higher than she’s ever seen them.