Record cattle prices reached
Thu, 31 Mar 2011 21:13:25 GMT —
30% of the nation's cattle comes from this region...about 7 million head, and those cows are now worth more than they have ever been in the past.
Prices are in record territory which is great for producers and the local economy...But it will also mean higher prices in the future.
Meat on the hoof is worth more these days than in any time in the past. Cattle are fetching 1.21 to 1.25 per pound, meaning some cattlemen are seeing record profits as well, according to Don close, Marketing Director for the Texas Cattle Feeders Association.
"Total value of a live steer? About $1400. It's been a huge boost to the local economy, we're seeing local job growth well beyond the local and regional average on whole."
But, the cost of producing those cows is also up, which cuts into profits.
"The cost our members are paying are all record highs as well."
Exported cattle are also up...about 25 percent from about a year ago, and prices are expected to stay in record territory for the next few months...
Which isn't exactly great news for those budgeting their monthly shopping expenses.
Brad Johnson with Amarillo National Bank explains.
"It's going to be passed onto the consumer ultimately...and it's going to take a little time to flow through the chain, but absolutely and how much the consumer pays."
Producers also know they can only absorb so much before the costs have to passed on.
Close says, "It's going to be a challenge to keep prices at levels that will draw consumers."
While Johnson notes, "At some point, the consumer does step away from the table, and it's going to be a huge impact."
Which brings about the catch-22 situation. Higher cattle prices improves the economy of the panhandle but a higher cattle market means you'll be paying more at the supermarket.