COLLEGE STATION Beef producers are getting an early Christmas bonus, in spite of a drought that has plagued Texas for most of the last five years.
“There is a bright spot in the livestock business because feed prices are a little lower,” said Dr. Travis Miller, agronomist with the Texas Agricultural Extension Service and a member of Gov. Bush’s Drought Preparedness Council.
Dr. Ernie Davis, an Extension beef economist, said feedlots are looking at dwindling herd sizes across the state, and they are hoping to buy as many cattle as they can.
“There are more lighter weight cattle out there for two reasons: No. 1 is we don’t have the winter pasture because of the dry weather. And, No. 2, feedlots are looking at smaller herd numbers. They understand that they’ve got fewer feeder cattle, and they are scrambling to get them before they run out.”
Davis also pointed to an increase in demand for beef and new innovative ways to market cheaper beef cuts. That leads to increasing the overall value of the carcass, he said.
“For the first time since 1976, we’ve seen a significant increase in demand for beef,” he said. “Hog numbers are down, and there has been a lot of money spent on the beef checkoff program. Retailers finally woke up and saw that these fast food restaurants were beginning to take away their beef sales. They decided to get some of those beef sales back by going with shelf-ready, or partially prepared products that are ready to eat in 10 minutes. You’ve got that going on all across the nation right now.”
Davis predicts beef prices will continue an upward climb, with some of the highest prices to come during the fourth quarter of 2000.
“Actually, the peak could be extended to 2001,” he said. “If people don’t start expanding herds, this thing is going to dwindle down even smaller. So that means prices are going to go up.”
Lower grain prices are enabling producers to hang on to cattle, even though pastures are dried up, and there is little available forage.
Curtis Burlin, owner of the Navasota Livestock Auction Co. in Navasota, said, “The cattle market has just run off in the last six weeks. It’s got to be because of the cheap feed. The corn crop was massive in the Midwest’s Corn Belt.
“The market is fantastic. Producers are having some money to buy feed,” Burlin said. Therefore, producers can keep cattle instead of having to sell them off.
Several factors are fueling the increased beef demand by consumers.
Lisa Williams, spokesperson with the Texas Beef Council, said, “We’re seeing beef demand stabilize and then turn upward for the first time in 20 years.”
Two things are positively impacting demand: a strong U.S. economy and export market.
“Consumers are understanding what a great nutrition value beef is, and the demand for new convenient beef products is increasing,” Williams added.
Microwaveable hamburgers that come in re-sealable bags saw more than $1 million in sales in the first 50 days after their debut in July. Also, a new 7-minute microwaveable pot roast is becoming very popular.
“We’re trying to get to a consumer who wants a meal like mom used to make,” Williams said, “But the consumer doesn’t want to put the time and effort into it.”
Light rains across most of the state in November and December have had little effect on pasture growth, Miller said.
Winter wheat upon which many producers depend for grazing is in dire need of moisture to produce pastures and/or grain that can be harvested with a combine.
“Many ranchers are in the fourth or fifth month of feeding in an effort to maintain herds,” Miller said. Livestock culling has increased slightly, with some producers completely liquidating their herds.
Some of the state’s producers especially those with only surface ponds are hauling water or moving livestock to other pastures, said Dr. Stephen Hammack of Stephenville, Extension livestock specialist.
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