Beef demand is up, cattle farmers still taking a hit

LANCASTER, Ky. (WTVQ)  – “It’s the second straight year that we’ve had a very, very, very drastic hit to our incomes,” said Kenny Burdine, UK Extension Economist.

The cattle market has seen improvements a year into the pandemic.

“On the beef demand side, there are a lot of positives; restaurants are reopening at large capacities…exports have been pretty strong,” said Burdine.

Farmers said they aren’t benefiting because of an ongoing issue of non-competitive bids from major packers.

“Supposedly, they’re making between $500 and $900 a head… Right now, I would have to do the math, but we might make $100 a head,” said Jared Ayres, a cattle farmer.

There’s another challenge, according to Burdine.

“Corn prices have basically doubled from where it was this time last year,” said Burdine. “So, that’s an increased cost for a lot of our cattle operations that are feed-oriented, and it also decreases the value of feeder cattle that are sold here.”

Burdine said the price of corn has been going up since last summer.

“To put this into perspective, we’re talking about something like, you know, $80 to $120 drop in what these large feeder cattle are selling for now compared to where they would have been even three to four weeks ago,” Burdine explained.

The reason for the increase?

“This has been more of a demand-driven change in grain price,” Burdine said. “I think mostly related to increases in exports.”

But farmers said they still shouldn’t be seeing this big of a loss.

“There’s enough money there, even with the corn cost the way it is, that we should still be reaping rewards, but unfortunately we’re not,” said Ayres.

As usual, farmers are optimistic and say there is still time for improvement throughout the year.

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