Beef producers face pricing uncertainty
Demand for meat isn’t boosting profits for cattlemen
Despite rampant demand for beef in recent weeks, producers face uncertainty because the current market isn’t increasing their profits.
Lincolnville feedlot operator Mike Beneke said events in recent years have not been kind to producers.
“Between 9/11, the mad cow disease scare, and a couple other issues, we’ve all lost money on the cattle side,” Beneke said.
He said he wonders about the right move to make and if futures prices will rise.
Fears of COVID-19 are prompting panic-buying, but Beneke doesn’t hold hope that demand will remain strong.
“There’s a big demand for immediate beef, but if they’re hoarding it, at some point they won’t need any,” Beneke said.
A related COVID-19 concern remains in his thoughts: what will happen to shoppers laid off because their work is “nonessential” or their employers’ lost profits prompt layoffs.
“Will people have enough money to buy beef?” he said. “Beef is the highest commodity of the meat.”
Government promises of help don’t reassure him, either.
“They talk about a stimulus package,” Beneke said. “But $3,000 won’t change much. That’s half the cost of tomorrow’s feed.”
Veterinarian Brendan Kraus, of Spur Ridge Vet Hospital in Marion, also raises cattle. He agreed with Beneke that recent years have dealt a bad hand to cattlemen.
“It’s been a terrible blow to the cattlemen,” Kraus said. “A lot of them are running on thin reserves from the several bad years.”
Kraus said the nation’s herd size has been rising in recent years because of increased demand for beef, but it now seems to be leveling off.
Despite panic-buying creating heavy demand for beef in the last few weeks, prices paid to cattlemen haven’t risen.
“The packers who buy the cattle from us, they’re making record profits,” Kraus said.
Kraus said he feels a lot of uncertainty about the situation.
Last modified April 9, 2020