Extension economist describes lack of profitability in cow-calf, feedlot operations


Capital Press

Lean times in Idaho's cattle industry led to a 15 percent decrease in red meat production in October compared with year-ago levels.

The decline was more dramatic than nationwide production, which was down 3 percent.

"A big part of that is cattle numbers, in general, have just been going down," said Wilson Gray, extension livestock economist with the University of Idaho at Twin Falls.

Higher feed costs and slower demand has feedlots losing $50 to $200 a head, he said.

"Feedlots haven't made money since late 2007," Gray said. "The cow-calf side isn't making money, either. Some are breaking even; some a little less."

Cattle numbers in Idaho have been coming down for three years, he said.

"Nobody's retaining heifers. Nobody's retaining herds. There's no light at the end of the tunnel." he said. "People are playing it cautious. The economics just aren't very good."

The large majority of Idaho's meat production is beef, with pork playing a lesser role.

Commercial red meat production at Idaho packing plants in October totaled 19.3 million pounds, down 1 percent from September, according to USDA-NASS. Accumulated red meat production for the January-October 2009 period totaled 191.2 million pounds, down 2 percent from the comparable period a year earlier.

Commercial red meat production for the U.S. was 4.39 billion pounds in October, down 3 percent from the 4.53 billion pounds produced in October 2008. Beef production, at 2.28 billion pounds, was 3 percent below the previous year. Veal production totaled 12.2 million pounds, 10 percent below October a year ago.

In the Midwest and down through the Plains states, feedlots aren't even close to capacity, Gray said. "We used to bring more feeder cattle in from Canada. But feedlots are shrinking -- there's not a lot coming down," he said. "Feedlots would rather custom-feed; at least they get feed costs back."

Cattle on feed for slaughter was up slightly on Nov. 1, but that's typical of seasonal placement, Gray said. Cattlemen place cattle on feed in the fall to have them ready for the post-holiday markets and later grilling season.

Cattle and calves on feed for the slaughter market in Idaho from feedlots with a capacity of 1,000 or more head on Nov. 1, totaled 210,000 head, up 2 percent from the previous month but unchanged from Nov. 1, 2008. Marketings of cattle from feedlots with 1,000 head or more during October totaled 44,000 head, up 5,000 head from the same month a year ago.

Nationwide, cattle and calves on feed for slaughter market for feedlots with capacity of 1,000 or more head totaled 11.1 million head on Nov. 1, up 1 percent above Nov. 1, 2008.

Placements in feedlots during October totaled 2.47 million, 1 percent above 2008. Marketings of fed cattle during October totaled 1.76 million, 3 percent below 2008.


Full report from the National Agricultural Statistics Service: http://usda.mannlib.cornell.edu/usda/current/LiveSlau/LiveSlau-11-20-2009.pdf

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