Cow-Calf Producers Beaming With Record Prices

It’s not something that’s been said often in the last decade, but now is a great time to be in the cow-calf business, as cattle producers are seeing all-time record high prices.

“We’re running about 60 cents to a dollar a pound higher than we were last year at this time,” says Rick Wright, the Virden, Manitoba-based head buyer for Heartland Buying Order Company. “If you’re in the cow-calf business, you’re a very happy farmer. If you own some inventory on the grass, you’re extremely happy, because yearling prices are also strong.”

As he explains in the interview below, nobody expected prices to soar this high.

“When cattle surpassed a dollar a pound, that was a new threshold. Then we passed two dollars a pound in spring and that was a new threshold. Now we’re seeing 900 pound cattle bringing $2.10 a pound. Good killing cows have surpassed a dollar a pound. We’re seeing live fed cattle getting live what we used to get for them on the rail,” says Wright.

Not only are cattle supplies tight, but the value of the Canadian dollar is also making Canadian animals more attractive to American buyers. Low feed prices have also improved margins for feeding cattle.

Related: Beef Market Update: An Amazing Run on Fed Cattle Prices — Now What?

Any expansion of the cattle herd in Western Canada will likely be delayed by the high prices, he says.

“We’re seeing a lot of guys in the 50’s plus exiting the business,” notes Wright. “When we start seeing two dollars for 800 pound heifers, it’s pretty hard to maintain those heifers and keep them in the herd.”

And it’s a scenario that likely won’t be changing soon, says Wright.

“Unless we see grain prices go up or the dollar surge back up, we’re probably going to see this (high prices) stay for two to three years.”

Here’s Wright’s conversation with Kelvin Heppner:

If you can’t see the audio player, click here.

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