Editorial: Hard Times Continue for Cattle Producers

From an historical perspective, cattle prices in the US are very good, Don Close, Vice President of Rabobank's Food and Agribusiness Research for Animal Proteins, told TheBeefSite.

However, exceedingly high calf prices and an unprecedented rise in feed grain prices are making this one of the hardest ever years for those finishing cattle.

Some feedlots are reported to be making in excess of $200 per head loss.

Mr Close explained that across the US, small feedyards are radically understocked. In some cases owners have depopulated yards and gone into a hibernating mode to wait out current market conditions.

When asked whether some feedyards were going out of business, he said: "Liquidation of cattle costs, so yes, there are some, who are having to call it a day."

Cow-calf herds liquidate

Last year saw herds in Wyoming, the Dakotas, Nebraska and Montana expand, despite the vast herd liquidation that occurred in the South due to the drought.

However, the 2012 drought has had a much further reach.

Despite conditions improving in the South, herds down there are still not in a position to begin rebuilding.

And this year, herds in the North are the worst affected by the drought. Efforts to rebuild herds have been quashed by severe pasture deterioration and many producers have been forced to liquidate herds.

Mr Close said that it would be at least two years until the national herd begins to stabilise and that is if conditions were to correct today.

Charlotte Johnston