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The 'whammies' keep coming for cattlemen

Agriculture.com Staff 02/12/2016 @ 8:08am

Cattle producers can't seem to catch a break these days.

They face the same run-up in input costs as their row-crop cousins -- fuel, equipment, fertilizer, etc. But, five-dollar-corn and 12-dollar soybeans will pay for a lot of $3.50 diesel fuel.

Cattlemen have no such luck with the sale price of their calves, which are expected to average $1.15 a pound this year. That's down from about $1.30 two years ago, before this "new age of agriculture" dawned.

When you talk about a bidding war for acres, you usually think of the battle between corn, soybeans, and wheat. But there's more to it than that. There's cotton, rice, sugar beets and dozens of other crops vying for acres, including...beef cattle.

At the recent National Cattle Industry Convention in Reno, Nevada, all of this was being discussed at length, and it isn't necessarily a pretty picture for the future of beef producers. Consider a state like Missouri, the number-two state in terms of beef cow numbers with about 2 million head. Many of those cows graze pastures that potentially could go to row crops, particularly in the northern half of the state.

Even 30-bushel soybeans, at $12 a bushel, produce gross returns that are 50% to 100% higher than what a 500-pound calf will return (one cow/calf unit requires 2.5 or 3 acres of pasture and hay land).

Or look at it another way. Say you're the absentee landowner, and you've been renting the ground to a beef operator for $70 an acre. You hear about the price of corn and know your land could grow at least a 100-bushel crop. Which way are you going to go?

Not all beef cow states have this alternative, especially as you move farther west into range country. But they do in Missouri and sourrounding states. One cattle fieldman in Missouri worries that his state could lose 20% of its cows -- 400,000 cows! -- in the next year or two in the acreage war.

Cattle industry leaders say the industry will adjust and adapt, compete and survive. They're right, but it's going to be a smaller industry with fewer families involved. And that will be a shame.

Cattle producers can't seem to catch a break these days.

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