Cattle prices on uncertain ground despite rises
Mark Harms and his wife, Kim, cautiously see the cattle market improving from where things stood in June after outbreaks of COVID-19 at meat processing plants.
The couple has been raising cattle for 28 years, selling seed stock so other producers can improve their herds. They maintain about 700 cattle on their ranch five miles southeast of Lincolnville.
“Our part in the supply chain is to provide seed stock for the producers,” Mark Harms said.
Demand for beef has been steady, but flat, he said.
Meat packing plant closures caused by COVID-19 made selling cattle difficult.
“Finished cattle have to be sold,” he said. “When they’re ready, they’re ready.”
When packing plants cut back on capacity, that creates a backlog on ready cattle, he said.
Prices paid fell so low producers were losing as much as $300 per head, and sold cattle for as little as $75 per head to end the loss of feeding them.
Buyers had cattle butchered at local meat lockers. Demand was so high the lockers were booked up into 2021.
The beef industry is working to make profits more predictable, Harms said.
“It’s going to take time for everyone to get it all leveled and everyone figures it out,” Harms said.
Harms said the export market and hotel and restaurant market demand a higher quality of beef. Not every animal is the same price.
“The big thing right now is we’re running near capacity, and that’s paramount for the cattle producers,” Harms said.
Labor supply for packing plants continues to raise concerns for farmers, he said. That’s because the labor supply affects the price of beef.
“Right now, Labor Day kind of represents the last consumer rally,” Harms said.
There are too many unknowns, he said.
“If we have an increase in COVID cases, it could pare back labor forces at the packing plants,” he said.
Feed cost also cuts into profits.
“Corn is the fundamental part of cost of feeding them now,” he said. “Feed grain experience is good the last few weeks.”
The growing season this year has not been without its weather scares, he said.
Last modified Sept. 10, 2020