031035 Cattle Producers Seeing Record High Prices

Hutchinson, KS - In a lifetime of working in the cattle business, Mac Frederick has never seen prices so high.

“It doesn’t make my job any easier, but it makes it a lot more fun,” said the owner of Central Livestock of South Hutchinson.

In late September Kansas State University’s weekly market update said 700- to 800-pound feeder cattle are averaging around $103 a hundredweight, up $20 from a year ago. Feeder cattle weighing 500 to 600 pounds are averaging around $110 a hundredweight. Kansas State economists also reported fat cattle — those moving from the feedlot to slaughter — are selling at $89 to $90 a hundredweight, up from $66 in September 2002.

The price spike was influenced by ranchers cutting herd numbers due to drought and the slumping farm economy. And in May, the U.S. banned cattle imports from Canada after a single case of mad cow disease was confirmed in Alberta.

“They’re record feeder prices since I have been here,” said Mike Lewis, part owner of the Pratt Livestock sale barn and a 40-year veteran of the business. “This is great for the cattle producer.”

Despite the high prices, there is still a demand for the cattle, said Ken Winter, with Winter Feed Yard and Winter Livestock, in part because protein-based diets are gaining in popularity.

Winter admits the cattle he buys at record high prices could lose value before he sells them. Cattle will break even if prices are at $80 a hundredweight and, historically, markets don’t average much over that.

“But we have done an excellent job of selling cattle up front and forward (contracting),” he said. “I think the market is solid, the outlook good. These cattle, I think, are a good risk.”

Frederick has watched loads of cattle that have come through his Central Livestock operation in the past few months, and said, “It is a serious time when a guy is selling their livestock. But there are some that can’t help but get a big old smile on their face when cattle are selling that high.”

Source: FencePost.com

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