Beef Buzz News
CattleFax CEO Randy Blach Says Inflated Prices are Here to Stay
Tue, 26 Oct 2021 10:22:41 CDT
Whether you are purchasing gifts ahead of the holiday season, fuel, cattle feed and more, odds are you are paying more thanks to inflation. Inflation is a hot topic at this year's 2021 Texas Cattle Feeders Association Convention. Radio Oklahoma Ag Network Director Ron Hays caught up with CattleFax CEO Randy Blach at the convention to talk about inflation.
Blach spoke to TCFA members, telling them inflation is here to stay, impacting everything for the next several years.
"I do not know how you could slow it down," Blach said. "You got an economy that is not fully back on board - not only in the U.S. but around the globe."
For cattle producers and feeders, inflation is being translated into the costs of feed and grain. Drought in hay and cattle country has made winter forage expensive. At the same time, grain prices are also higher. According to Blach, that means break-even points for producers and feeders will increase.
"You look out here and see what is going on with feed-grain prices, oil prices, energy prices - again the value of energy in our grains is part of the driver," Blach said. "I think that is the reason that when you look at it relative to historical supply and demand prices, corn is about 50 cents a bushel higher than it would typically be given this type of a stocks-to-use ratio."
Ultimately, costs to produce goods and services will trickle down to folks like cattle producers and feeders, Blach said. Inflation will translate into tighter cattle numbers in the future, he added.
Blach's 2022 forecast cash cattle prices to be between $1.20 and $1.60 per pound, with the average price being about $1.35. While that seems like an improvement, at first sight, inflation will most likely keep profits flat, Blach said.
"It will cost more (to produce cattle) - cost of inventory is going to go up," Blach said.
Until America's beef cattle herd shrinks enough to match processor capacity, cattle producers will continue to struggle.
Click on the LISTEN BAR below to hear more from Ron Hays and Randy Blach as they talk about inflation effects on the cattle industry.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Listen to Ron's conversation with Randy here.
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