• September 22, 2014

Cattle prices climbing as drought continues to take its toll

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Posted: Monday, February 24, 2014 4:30 am

CAMERON — Despite recent rains, drought is still taking its toll. Cattle prices have been shooting up since January, and when they stop increasing is anybody’s guess.

Prices have been higher than previously recorded, said Kevin Gleason, general manager at the Milano Livestock Exchange. Calves from 350 pounds to 600 pounds are bringing $850 to more than $1,000, with yearlings bringing $1,200 to $1,300.

“I’ve never seen it higher,” Gleason said. “Every class of cattle is bringing high right now.”

Livestock exchange owners Ronnie and Stephen Lastovica said the prices are the highest they have ever seen in their 28 years in business.

“They’re selling their calves a little quicker because they know the market is good,” Gleason said. “They’re optimistic about keeping their cows now as good as the market is and they’re also willing to buy a few more cows. The replacement market is high right now. People are saying the market should hold through 2015 and it could hold after that.”

The cattle supply is still short, not having been built up from 2011, and corn prices are lower.

“Until the supply gets back to where it used to be, it’s basic supply and demand,” Gleason said. “People have the right conditions to be making some money in the cattle business now. Prices are extremely high.

“The latest auction at the exchange was stronger, not showing any weakness. We’re starting to see more cattle hit the market. The supply for the area is getting back, but is not where it was.”

“We could still use some rain,” Gleason said. “We’re not out of the drought. Supply and demand is driving what is happening. Around the country, supplies are shorter than what they have been. People continue to buy beef and enjoy a good steak. People who want to eat beef, eat beef.”

“The cattle market is stronger than ever,” Milam County rancher David Waiser said. “The numbers are increasing and the demand is there. Everybody wants hamburger meat. We can’t produce enough.

“With the price you can get at the sale barn, everybody is selling what they can sell. It’s hard to keep a replacement heifer. From the last I heard, you can take a 600-pound steer calf and it brings $1.80 a pound. That’s pretty good cash money. They’re selling their replacement heifers. They’re worth too much at the sale barn.

“We’re not out of the drought yet,” Waiser added. “Grass is short right now. We could use another rain pretty quick. They’re selling all of the young calves, trying to pay the bills that we got from 2010 and 2011 with all the feed. It’s supply and demand. This is worldwide, not just in the United States.”

Waiser is slowly restocking his herd after the 2011 drought, but it will take another three years for him to get where he wants it to be. “I’m having to cull out the rest of my old cattle. It’s a Catch-22. It would be easier to restock if we had a little bit more moisture and grass. We need a rain to get the winter grass growing. We need a general rain.”

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