Beef industry turned upside-down

 

How things change!

Two years ago farmers were knocking on the doors of politicians and then-president Joe Biden, pleading for something to be done to bring more competition into bidding for slaughter-ready cattle.

The Biden administration responded with investigations into pricing and a program to subsidize more investors to get into beef-packing.

Today farmers are averaging a profit of $788 per head for slaughter-ready cattle and beef packers are drowning in red ink.

The Sterling Report ,which is highly regarded by cattle drovers, said packers paid a record $244.41 per hundredweight for Choice steers, a $48 jump compared to the same week last year, while the Comprehensive Cutout Value fell nearly $5 to average $364.54 per hundredweight.

Packer margins plummeted to an estimated loss of $316.28 per head, the largest weekly loss since Sterling Marketing began tracking data in 1988. Reduced slaughter numbers — a mere 535,000 head processed — contributed to continued capacity concerns.

So much for government subsidies to get newcomers into packing and increasing slaughter capacity.

Feeder steers weighing 750-800 pounds are selling for a record $348.49 per hundredweight which is a new high for breakeven prices on placements at $228.53 per hundredweight.

When I was preparing speeches for the late Agriculture Minister Eugene Whelan at a time when the news media were clamouring about high food prices, I wrote "the cure for high food prices is higher food prices, and the cure for low food prices is lower food prices."

As prices and profits, farmers increase production; as they fall and farmers lose money, they produce less and some go broke.

Government intervention, Whelan said, would only make things worse. Biden obviously didn't get that advice from people paid a heck of a lot more than I was.