Wednesday, February 15, 2012

Cattle Production Lowest Since 1952 - It Is Insanity!

Yes, it is insanity!

A combination of drought, heat in the Southwest, a lousy economy, and high feed and fuel costs have all contributed to a short supply of cattle in the United States in 2011.

This all has meant a drop in the total herd count to 90.8 million animals. And according to the U.S. Department of Agriculture, that is the lowest since 1952.

Imagine that for a moment. We are producing the lowest herd count in 60 years!

And no, contrary to what the idiots in PETA have to say, this is not a good thing at all. Fact is that the world population has not stayed the same as it was 60 years ago. And yes, people need to eat.

For the American consumer, this means that these latest numbers will continue a trend that has caused supermarket beef prices to rise by about 12% last year, this is according to the U.S. Department of Labor.

Inside cattle traders are saying that report came to no surprise to many, and said that consumers will most likely continue to see high beef prices through the summer. The price of ground beef was up 23% last year, with the more expensive choice cuts rising less.

But, yes, that's according to Federal government figures which may or may not be accurate depending on what you read.

It is a mixed bag of figures. Some are saying that the price of choice boneless roast was up 12%, but the price of choice sirloin steak was up only 1%. Supposedly the difference is because retailers protected their most profitable beef item.

Iowa maintained its 3.9 million-cattle herd, the nation’s fifth-largest total. But of the states ahead of Iowa, only Nebraska was able to raise its herd totals, from 6.2 million animals to 6.45 million.

Texas, which was hit extremely hard by a crippling drought, lost 1.4 million animals, to bring them in at 11.9 million. Oklahoma saw its total herd drop 600,000 animals, to bring them in at 4.5 million. And yes, Kansas also lost 200,000 head of cattle, which brought them in at 6.1 million.

Some reports say that consumer demand for beef has been declining in recent years, others say it has just flattened out due to a sour economy. But this, combined with a tough weather year and high feed and energy costs, has made cattle producers react by restricting the size of their herds.

The good news for the cattle market is that, while the domestic market may be sluggish, the export demand has actually risen by 30% in 2011.  Asian countries, such as Japan and South Korea, are leading the up swing in purchases of U.S. beef. 

Yes, the Chinese want American beef. China made a large purchase of U.S. beef in the last days of 2011.

So the lower number of cattle available, a sour economy and a higher cost of producing cattle here, was sort of off set by a rise in foreign demand for cattle. But that did not stop cattle prices from rising by more than 25% last year.

A few weeks ago slaughter-ready cattle closed up 15 cents per hundred-weight at $124.70, and younger feeder cattle were up 98 cents per hundred-weight at $154.60

My problem with this news is that just last year the cattle industry was declaring a livestock glut. So how can there be a "glut" of cattle last summer, but now there is a shortage?

And also, if folks take a long look at this new revelation that the amount of cattle produced in America is at the same level as it was in 1952, then people should be screaming for answers as to who's fault is it?

Yes, this is not a good thing at all!  Friends, comparing 2011 cattle numbers with 1952 cattle numbers is not comparing apples and oranges. It is a huge flare signaling trouble!

Why you ask? Well, the biggest thing that jumps right at you is the fact is that the population of the United States has about doubled since 1952.  This means that will have about 150 Million more American mouths to feed than we did in 1952.

Do you see where I'm going with this? America can feed a starving world if we had sane partnership in the form of the Federal government.  And yes, like it or not, the Feds have made themselves partners in the same way that an extortionist does.

You see the Federal government does not encourage the production of more food. It does this in the same way that it does not encourage new manufacturing businesses. Over regulation from Federal agencies restrict growth and in many ways force Americans out of business.

Take feed and food for example!

We eat corn, but the Federal government in all of its wisdom is now encouraging Americans to grow and use corn as a bio-Fuel alternative to American oil.  This is fine if it does not have other ramifications - but it does!

First, because of the Federal government mandate that so much corn will be used in bio-Fuel, the price of corn and products that use corn is climbing.  This means that an American food source is now having to compete in price with it being used as an "alternative fuel source."

Because of the Federal government, a farmer can now get a higher price for corn used as bio-Fuel than he can for corn used as food. Because of this, farmers who normally grow corn for food are switching their crop to a lower grade of corn to be sold for bio-Fuel.

And that leads us to the problem connected to changing farming as a result of the Federal Mandate for bio-Fuels, the price of hay is going through the roof. Hay is the basic feed for livestock. These days farmers can get more if they plow under their hay fields and produce corn for bio-Fuel.

Why? Because the price of corn is high - and they can make more money on a richer crop than by growing hay.  This means that beef and other livestock hay, along with feeds made mostly of corn, are steadily going up in price.

Yes, it's a double hit!  This all means that a livestock producer, and cattle producers being the biggest of them, are having to cut costs. If not, then between the cost of adhering to Federal regulations and the higher feed prices may put them out of business.

And friends, there are only so many ways to cut cost when running a business. And yes, cattle producers have the same limitations. They can either cut down on the cost of expenses by laying people off, or by feeding in other ways, or by producing less cattle to feed. 

The numbers show that most are raising less cattle. And that, in a time when the population of the world is growing by almost 2% yearly, is insane!

Granted a combination of drought, unusual heat in the Southwest, and a bad economy have all attributed to the problem, but the Federal government and its policies have driven up the price of feed and and fuel costs and made the problem even worse.

Yes, I do blame the Federal government for this insane policy of driving up production costs by diverting needed food resources to other industries - especially when the alternatives for energy are out there and food sources don't need to be touched as one alternative.

Americans should be growing more food to feed people, not growing less. Our Federal government should be allowing our ranches and farmers the ability to raise what they can as long as the weather and their own hard work allows.

The Feds should not be restricting growth, or impeding their efforts. And yes, people should be using food to feed people and animals - not to power high priced Hollywood limos or small Eco-friendly cars. 

Our government should be encouraging Americans to use our own resources for what they are designed for - oil for machinery - and corn for food and feed. What's so difficult about that to understand?

Yes, weather conditions are certainly a factor in agriculture, but Americans should not be having higher prices at the store as a result of what the Federal government is doing to control our food and feed producers.

The government seems to be under the impression that they need to control every aspect of our daily lives, especially when they have no right trying to do so.  

Story by Tom Correa

No comments:

Post a Comment

Thank you for your comment.