By Jamie Martin
Beef prices in the U.S. have surged to record highs, with the national average price for fresh beef exceeding $8 per pound, according to the U.S. Department of Agriculture’s Economic Research Service. However, cattle farmers are finding that these soaring prices don’t necessarily translate to higher profits.
Elijah Griles, host of the Virginia Farm Bureau Federation’s CattlePulse podcast, explained that rising interest rates and increasing costs of production are putting pressure on farmers. “We’re seeing an upward trend in the cost of production for feeder cattle,” Griles said.
Drought conditions in parts of Virginia and the U.S. have also worsened the situation by limiting the availability of hay and forage, further driving up costs.
Many cow-calf producers are sending more female cattle to slaughter, reducing replacements and contributing to cattle inventory contraction. As a result, while beef prices are high, the supply chain faces challenges, and demand is expected to decrease by 2025, according to ERS predictions.
Bernt Nelson, an economist with the American Farm Bureau Federation, noted that higher prices can benefit farmers selling calves, but those looking to expand or start new operations are struggling due to high costs. “Higher prices benefit sellers, but they make it tough for buyers,” he said.
Chris Frazier, a cow-calf farmer and regional sales manager for Farm Credit of the Virginias, said that while feed prices have recently declined, high interest rates continue to impact profitability. Some farmers are holding off on purchases, waiting for interest rates to drop.
Frazier advises farmers to manage risk and remain optimistic. “We’re seeing light at the end of the tunnel,” he said, suggesting that cautious optimism may help farmers weather current economic conditions.
Photo Credit: national-cattleman-s-beef-association
Categories: National