Day one of Colorado Farm Show looks at beef market volatility and future outlook
Wednesday at the Colorado Farm Show
Wednesday’s presentations at the Colorado Farm Show will be on dairy, Colorado weather, big data and precision agriculture. For a full schedule, go to http://www.greeleytribune.com/news/local/20147279-113/colorado-farm-show-schedule-of-events-and-information.
After 2014, a big year for beef producers, cattle prices have dropped. But how far down will they go in 2016, and what kind of impact that will they have on Colorado’s producers?
The market is so unpredictable that even the Colorado Commissioner of Agriculture, Don Brown, a long-time rancher, can’t answer them.
“I don’t know a lot about the beef business, other than it’s a tough one. I don’t have a clue where the market is going to go,” Brown said during his presentation Tuesday at Island Grove Regional Park. “What I know about the beef business is I don’t know.”
He said when the market got good, it got too good. Now, just like a hot stock, it’s in a correction. Brown has seen this pattern before, such as in the late ’70s when he started in ranching and thought the industry was going to take off.
Then in the mid-’80s, prices dropped so low, they fell off the bottom of the chart he used to keep track of cattle futures.
The beef game can be a good one, he said, but it’s also one in which you’re incredibly vulnerable.
After the lunch break, James Robb, the director of the Livestock Marketing Information Center, gave a presentation on beef futures and the potential numbers producers could expect in the coming years. It was a mix of good and bad news, with beef continuing to sell for higher prices than pork or chicken, but the price for beef should continue to fall. Herd numbers for the U.S. are rising, and could be back up to almost 100 million head by the end of the year, Robb said. That’s higher than it’s been since the drought in 2012 wiped the beef cattle numbers down below 90 million head.
Now, though, since more cattle is coming into the market, producers need to be more willing to accept early bids on calf crops, rather than waiting and hoping for better offers later in the year. It’s possible, even probable, those offers will get lower as time goes, Robb said.
For Dale Jackson, a 68-year-old rancher who runs about 15 head of cattle in Kersey, trying to sum up the impact the cattle market has on him really depends on the day.
“It’s all cyclical,” he said, calling the high prices of the last few years outrageously good. “It’s headed back down now. We don’t know how far down it will go.”
But it’s been that way forever. There was a time, during the Great Depression, that ranchers literally couldn’t give their cattle away. Now, Jackson said the country’s just come out of a period in which there is barely enough cattle to satisfy the need.
Brown told a similar story of his grandfather, who used to ship his cattle to the market in Omaha, Neb., via railcar. He’d have to ride in the train with them and tend to them the whole way. Sometimes, the market would be so bad, the cattle wouldn’t bring enough money to pay the price of the train ride.
“(Beef is) still bringing enough to pay the freight,” Brown said. ❖
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I want to address a couple of issues in this week’s editor’s note.