Record high cattle prices dominate the talk at the Cattle Industry Convention this week in Orlando, Florida. Some feeder cattle have sold for over $3 a pound in recent weeks, putting a little extra jingle in the pockets of cow-calf ranchers. Here’s what a few beef producers told us as they registered for this annual cattle extravaganza.
Dustin Shaaf, Sydney, Iowa, raises and sells calves for the specialized show-calf market from a few cows on his farm. He’s made a good business of it by selling crossbred calves for $10,000 to $15,000 on average.
But the real reason he’s in Orlando is because he’s also a cattle buyer for Greater Omaha Packing Company in Nebraska and Iowa. He’s networking with feedlots and beef producers from whom he buys cattle. “I come every year. A lot of our customers are here.”
Everyone knows the “big four” meatpackers (JBS, Cargill, Tyson, and National Beef) who collectively slaughter 85% of all the cattle in the U.S. But fewer people know of Shaaf’s company, Greater Omaha. “We’re Number 5 on the list, but we only process about 3% of all the cattle,” he explains. They’ve built a specialty market for quality Hereford beef, much of it going to high end restaurants and retail outlets in the eastern U.S. To qualify for this specialty market, the cattle must be at least 51% Hereford breeding, and grade Select or better on the rail. If they qualify, Greater Omaha pays a $40 per head premium.
Greater Omaha also is the biggest supplier of beef headed for the European market, where the demand is for a natural product – no hormones, no antibiotics.
One thing that worries Shaaf is that the current feeder market is so over-heated with record prices, and that’s in the face of competing meats that are much cheaper. “I’m afraid we’re going to price ourselves out of the market,” he says. “The cow-calf guy is OK for now, but the fourth quarter of this year worries me for the feedlots that are paying these high prices right now for feeders.”
Matthew and Shirley Matlock, Greenfield, Indiana, grow crops and have a herd of about 130 beef cows. They’ve never been to Cattle Convention before and are here just to learn and network. They have two sons and a daughter who may want to return to the farm, plus three grandkids, and the Matlocks are thinking of ways to accommodate them. They already have a small on-farm feedlot, and are considering expanding it.
“To make the feedlot work, we need to be at 4,000 to 5,000 head,” says Matthew. “Really, we’re changing our vision of the future.”
If they do expand the feedlot, it probably won’t be at the current location, which is not far east of Indianapolis. “With land around us selling for $50,000 or $60,000 an acre for development, we can’t compete with that for a farm,” he says. Matthew and Shirley are going to spend time this week at Cattle Convention talking to people, particularly finance people, about what it would take to go forward with the feedlot idea.
Matthew is particularly passionate about making room on the farm for their kids and grandkids because he feels there just aren’t enough young people returning to farm. “That’s true in agriculture in general,” he says. “We’re losing young people from the farm every day.”
For now, Matthew and Shirley’s cow-calf business is doing well. They recently sold a load of quality steer calves for $3.26 a pound.
Custom cattle grazing
Erik Steffens, Dighton, Kansas, has made a business out of custom grazing and caring for other people’s cattle. “There’s a feedlot we work with that sends us calves in the spring,” he explains. “We’re in a position where we have access to family or other leased land, and we can graze those calves through the summer, then return them to the feedlot around early September.”
That timing is good because Steffens likes to have the cattle gone before fall harvest sets in on the farm.
Most of the calves the feedlot sends to Steffens are spayed heifers. If they’re spayed, they don’t come into heat, which helps sustain gains. They usually arrive at his farm at about 600 pounds, and over the course of the summer, he shoots for gains of two pounds per day. “That’s hard to get,” he admits.
One thing he likes about his relationship with the feedlot is that if he gets into a drought situation and grass is running low, he can call the feedlot and they’ll work with him to get the cattle moved early.
Steffens also custom grazes some mama cows for other cow-calf producers in the winter, using stockpiled grass and crop residue on their crop ground. ”The custom grazing gives us a little cushion from the market up and down swings if we owned the cattle.”
Steffens comes to Cattle Convention every year for the networking, and his wife, Katelyn, works in the beef industry, too. His worry for the future is the disconnect between rural and urban residents. “I wish we were teaching more young people about our farm business and how we do good animal husbandry. They don’t know what we do out here on the farm.”