Cattle prices in Texas and nationwide have dipped in recent weeks and months, causing negative impacts for cattle producers.
Prices for Texas feeder steers averaged $145 per hundredweight, depending on weight and quality, according to the U.S. Department of Agriculture. That price is about $5 per hundredweight lower than the same time last year and about $33 per hundredweight lower than the five-year average. Prices dipped even further in mid-May and mid-August this year.
David Anderson, an agricultural economics professor and AgriLife Extension economist at Texas A&M, said beef calves and cattle are Texas’ top agricultural commodity, generating annual sales of more than $10 billion in the state.
“In the big picture, cattle and calf prices have been declining, and they’ve been declining for several years because production’s been growing,” Anderson said. “The cattle industry is a cyclical industry, and we’ve been expanding our cow herd nationwide. We’ve been expanding beef production and we’re pretty close to record, all-time beef production.”
Anderson said drought conditions in large parts of Texas, flooding in the Midwest and a severe Aug. 9 fire at a meat-packing plant in Kansas are other factors that have contributed to lower cattle prices in recent weeks. The Tyson plant handled 6% of the nation’s fed cattle capacity and harvested about 6,000 cattle per day before the fire, according to reporting from the Wichita Eagle.
Anderson said due to drought conditions, producers cut herds earlier — and thinner — than is typical. He said some producers started shipping calves sooner.
Calf prices are generally lowest in the fall, as well, he said.
“A bunch of these things happened at about the same time and really coincided with a large supply time of year, which has forced prices low and has really gotten people’s attention,” he said. “As cattle producers take calves to market, they’re seeing these lower prices.”
Anderson said there has been volatility in corn feed prices, which also impacts cattle prices. He said people in the industry are hoping for a late freeze in Corn Belt states such as Iowa and Nebraska to increase corn production and a more abundant feed supply, which he said would likely result in somewhat higher calf prices.
Anderson said that though demand and prices for brisket continues to be high, any one cut’s popularity has a limited effect on cattle prices at large.
“Briskets are only one cut from a steer, and you still have to sell all the meat from the animal,” he said.
“Food trends do have an effect on prices — particularly prices of individual cuts,” Anderson said. He said ribeye prices often increase toward the holiday season.
“We often think about ground beef and hamburgers for grilling season. We’re hitting the fall and so some of grilling season begins to slow down as it gets cold, though I don’t think it ever slows down for us here,” Anderson said with a laugh.
Regarding impacts of international trade and tariff news, Anderson said the U.S. has “had some pretty large growth” in terms of exports to China over the last two months, though the number of total beef exports to China remains small. He said that the ongoing trade war with China has had minimal impact on beef prices.