Beef prices rise due to drought and low cattle numbers

BUTLER, Mo. — Drought across the country over the past three years has left cattle producers facing shortages of pasture, hay and water.

“We sold a ton of cows two years ago,” said Jim Herzog, owner of Mo-Kan Livestock Auction. “We sold 300 to 400 cows every Thursday, and they all went straight to slaughter.”

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Dry conditions have forced farmers to sell their cows to generate cash flow to stay in business.

“Last year, for example, it was dry, there was a shortage of hay and prices were high, about $130 a bale,” Duke said. “Producers couldn’t afford to buy hay and keep cows. So they had to sell their cows.”

According to Duke, this year is different.

He says cattle producers have plenty of hay and drier conditions are forcing them to feed hay.

Cattle producers will be able to maintain manageable herd sizes.

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“I don’t think we’ll lose any more cows to this drought just because we’ve been blessed with a good hay harvest,” Duke said. “With lower commodity prices, producers can afford to feed them grains and proteins that help them survive drought.”

Bruce Mershon is a cattle producer from Buckner, Missouri.

I met him at the auction on Saturday.

“My wife Tracy and I are selling 45 of our six-year-old cows and their calves,” Mershon said. “Today these cows are between 30 and 60 days old. I’m guessing they could fetch somewhere around $3,500. The calves combined are somewhere between $3,000 and $3,500.”

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Mershon’s cows are not slaughtered. They are sold in pairs to other producers for breeding.

He is one of many cattle producers affected by drought over the past three years.

The January 1, 2024 Cattle Inventory Report released by the USDA states that the cattle population has reached its lowest level since 1951.

The decline in cattle numbers in the United States has created supply and demand issues and increased prices for producers and consumers.

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“We have positive margins,” Mershon said. “Unfortunately, I don’t think they’re wide enough and we’re going to start breeding more cows. We’re just going to maintain the same number of cows as it looks for the foreseeable future.”

The Bureau of Labor Statistics reports that the price of all raw beef steaks increased by $3.20 from March 2020 to September 2024.

Mershon said demand from international trading partners and U.S. buyers shows consumers are willing to pay more for quality American beef.

“We’re starting to get a share of that retail dollar,” he said.

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Although livestock producers are starting to make a profit from their animals, drought is still on their minds.

“The biggest concern is the water in the farm pond,” Duke said. “Not everyone has rural water or a well. You can haul hay and haul feed for livestock, but it’s hard to haul water. We just need rain to fill these ponds.”

Parts of southwest Missouri are experiencing severe drought, and much of the Kansas City area is experiencing severe drought.

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“People don’t realize that when the grass stops growing and the cows eat very little of it, we have to feed it,” Mershon said. “It really makes it difficult to produce next year. “Maintaining adequate moisture is not just about today, but about the next six months or next year, and our ability to grow grass and raise livestock in the most efficient way for consumers.”

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Mershon said market trends predict the cost of quality-labeled beef products will remain high. Increased profits in the fall will support farmers as the weather turns into winter.

“I’m just optimistic that we’re doing a better job every day,” Mershon said. “If the weather matches demand and we have good demand for our products, I will be confident about the future.”