See five key areas that present challenges for beef cattle producers according to a UF/IFAS Extension Livestock Economist State Agent.
In 2021 and beyond, “managing cost of production will be essential for beef cattle operations to maintain cash flow and remain profitable,” according to UF/IFAS Extension Livestock Economist State Agent Chris Prevatt in a South Florida Beef-Forage Article of the Month. While cattle prices are slowly improving and herd reductions could help them improve further, those “market improvement might not keep pace with significantly higher input costs,” he says. He recommends beef cattle producers plan for the following five challenges.
Five Challenges for Beef Cattle Producers
Prevatt recommends that beef cattle producers discuss and address the following five areas with your team and formulate solutions now:
- “The COST OF EVERYTHING.Is there anything that you’re paying less for in 2021 compared to pre-COVID? Input costs are higher just about across the board. If input prices are higher, then the cost of doing business is higher. Unfortunately, these increases in cost of production during 2021 have far outpaced price increases in feeder calves meaning that margins and profits are smaller. The pandemic has taught us how fragile our supply chains really are…”
- “What are you gonna feed? And at what price? Feed prices are high and truckload units of feed seem to be much more difficult to locate and purchase than any other time in the last decade. The harvest of row crops across the U.S. this fall will make feed supplies adequate in the short-run. However, it now has to be rationed for another 12 months and with commodity stocks expected to be tight going forward. Beef cattle producers searching for by-product supplementation next Spring and Summer should expect to find supplies scare and price high…”
- “Wintering Your Cowherd.DO THE MATH. Last year hay was expensive (at least the kind that wasn’t stacked in the woods). Now it’s even more expensive. Add in feedstuffs that are over $200+/ton and you have yourself an expensive ration to feed a cow for 120 days this winter. Can you winter a cow for less than $200? or $250? … and maintain her body condition? Put a pencil to it and show your county extension agent your numbers.”
- “Could Processing Speeds at Meat Packing Facilities be inhibited further by COVID protocols or mandates?After what happened in August 2019 with the Tyson Beef Plant Fire and again in early 2020 when COVID-19 slowed processing, we know this is always a risk. Hopefully we won’t have a repeat, but the point should be understood that any disruption in future processing speeds has the potential to backup the cattle in the feedyards and cause cattle prices to decline significantly similar to 2019 and 2020.”
- “Price Fluctuations.It’s important to understand that regardless of COVID-19, the beef cattle industry was extremely volatile prior to the pandemic. Over the last ten years, every single year there has been at least a $20 per hundredweight move in CME Feeder Cattle August Futures…”
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