Cattle prices down, but not like 2003

FAR WEST TEXAS — Cattle prices are down, but area ranchers say the price drops are nothing they haven’t seen before.

With an average rate of $145 per hundredweight, cattle prices are $5 lower than last fall and $33 below the five-year average, The Texas A&M AgriLife Extension Service stated in a Texas Crops and Weather report last month.

David Anderson, an economist with the center, said a number of factors were driving down prices, including drought and a record-high herd count of 4.65 million cattle in Texas.

A Kansas meatpacking plant, which would have typically handled around 6 percent of the fed cattle capacity in the United States, caught fire in August, according to the report. That caused a bottleneck of cattle that also lowered prices, Anderson said.

“I don’t like to use the word panic, but there was some concern about what the loss of that plant would mean, and the market reacted,” he said in the report. “In my opinion, it overreacted.”

Still, area ranchers say the ups and downs in the market are just a part of working with a commodity like cattle.

“It’s a free market and it’s supply and demand,” Ellery Aufdengarten, a Marfa area rancher, said. “Right now, evidently, we’ve got enough supply to meet demand. The prices are a little soft right now.”

The price fluctuations are a “cyclical thing” and “nothing new,” he said.

“They’re not that bad,” he said. “It could be worse.”

Another Presidio County rancher, who provided context on the low prices, agreed. Droughts earlier this decade caused high cattle prices in 2014 and 2015. That no doubt contributed to ranchers’ decisions to rear more and bigger cattle, which has in turn caused prices to lower.

Still, little compares to the “mad cow” scare in 2003, which virtually shut down the cattle industry in the United States. That scare wasn’t a part of normal price fluctuations and had more long-term effects, he said.

One of the worst parts about the current low prices, said Aufdengarten, is that it comes at the same time as droughts. “It’s hard to fight them both,” he said.

Most of Presidio County and Far West Texas are currently faring relatively well, with just small portions rated as “abnormally dry” as of October 3. But much of the state is still in moderate to extreme drought, according to the United States Drought Monitor at the University of Nebraska-Lincoln.

The report wasn’t all bad news for ranchers, though. Exports have remained good, with exports to China continuing to grow despite a trade war with the country. (One possible explanation: An outbreak of African swine fever in China has caused a nationwide pork shortage.) And despite the buzz around plant-based beef substitutes, alternative proteins haven’t “made a measurable impact on the demand for beef,” according to the report.

The Texas and Southwestern Cattle Raisers Association and the United States Cattlemen’s Association did not respond to requests for comment by press time.

In other Far West Texas agricultural news, cotton and pecan crops are doing well, though white flies — a major pest — have been spotted in many fields.

Small grass fires were reported in some places, and thunderstorms brought around four inches of rain, according to the September report. But that arguably beats the conditions in far East Texas, where heavy rains flooded fields and delayed harvests.


 
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