Fewer Cattle Mean Feedlot Operators Must Tighten Their Belts Further, Ross Wilson SaysThu, 28 Mar 2013 18:22:21 CDT
The latest Cattle on Feed Report reflected the new reality of fewer cattle in the pipeline. There were 14 percent fewer cattle placed in feedlots this past February compared to one year ago. Ross Wilson with the Texas Cattle Feeders Association says the smaller numbers mean problems for feedlots in Texas, Oklahoma, and New Mexico.
“That’s one of the reason we saw Cargill close one of their major beef packing plants in Plainview, Texas. They have one remaining in Friona, Texas, and the, of course, the plants north of there. We are hopeful that brought some balance. Without question, it made the existing plants more efficient because it moved those cattle into some other plants. But that’s short term.
“Long term we continue to have some excess capacity. Some would say, within the beef packing industry, that that may or may not have to be addressed, hopefully not in the southern High Plains. And we have a corresponding excess capacity in the feeding industry.”
“Now, that’s not been documented well. I can understand why it has not, but you can look around the country and you can see some feed yards that have already closed, not just in the last year or two, within the last five years for any number of reasons. You can see feed yards that have shifted from feeding to backgrounding or partial backgrounding.
“And as far as weathering this latest storm in this recent two years of drought and the subsequent liquidation of the cow herd, our members indicate that they are going to operate at lower occupancies.”
With fewer cattle in the feedlot, Wilson says, operators have to tighten their belts, reduce expenses and stretch every dollar as far as they can. He says that risk management is also high on the list of priorities during these tough times in the feed yard.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also 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.
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