Cattlemen are looking to 2017 with cautious optimism.
Declining calf and feed prices and rising prices for slaughter cattle create a mixed outlook. Some cattlemen look to make better profits, and others will have to manage well so as not to lose money.
Feedlot operator Mike Beneke, who said he lost about $2 million in 2015 after several years of building his business, was able to refinance and get a fresh start in 2016.
He’s one of many in the cattle business who suffered losses in 2015 because of low sale prices, Beneke said.
“It was tough to swallow for everybody at that time,” Beneke said.
Beneke raises about 6,000 head on 36 acres of confined feed pens.
Ramona cattleman Tracy Brunner, who raises about 5,000 head for slaughter and grows feed for livestock, said the market wasn’t as rosy as he would have liked in 2016.
“It was a very disappointing year marketwise, but a very good year in other aspects, such as forage and grain production and cattle performance,” he said. “Cattle prices have been on the decline for about the last two years after about a two-year increase in prices. We’re basically about where we were three or four years ago.”
Weather was favorable in 2016, he said. For 2017, his outlook is cautious.
“I guess we’re going to continue to watch our expenses, and (will be) looking forward to a little more favorable cattle prices,” he said. “Cattle prices are already heading back up.”
This year looks better on several fronts, Beneke said. The price of calves, feed, and fertilizer are all lower.
“Fuel was lower last year already, so there will be no big changes there,” Beneke said.
Although Beneke’s operation seems large, “technically we still consider ourselves a small family farm,” he said.
He buys most of his calves from within a 200-mile radius.
“We buy ourselves a job when we buy the calves,” he said.
Calf operators will see less profit in 2017 because of lower prices for calves, he said.
“They’re going to lose money this year,” Beneke said.
Farming practices have changed over his years in the business. Some of those changes may be related to climate change.
“In some cases we consider the climate changes to be good for our parts,” he said. “We’re raising corn that we didn’t used to be able to raise in our area.”
However, variability of weather — also an element of climate change — can cause problems like record cold in mid-December followed by a warm and rainy Christmas. Cattlemen must be more attentive to climatological shifts.
With Marion County’s economy being rooted in agriculture, Beneke hopes a better 2017 will reach everyone.
As people make more money on the farm, they have more money to spend at local businesses.
“There’s not a lot in the county to sustain the small businesses,” he said. “In small rural America, it’s getting harder to keep a family-owned business open.”