Farmers getting milked by economy

Rising costs and falling prices put the squeeze on farmers.

By James Hatler

Published Dec. 9, 2008

The MU Extension cow auctions have done worse this year than in the past, in part due to lower sales prices because of the economic downturn.

The auctions, which have occurred annually since 1997, sell heifers, which are cows that have never given birth.

Eldon Cole, the MU Extension Southwest regional livestock specialist, said the general economic trend in the cattle market was not good.

"We expected a downturn in price," Cole said. "I guess we weren't expecting it to be quite as drastic as it turned out to be. We thought probably we'd end up averaging about $1,200 and we missed the mark by about $150 per head."

Additionally, costs were up for many cattle producers as they struggled with higher costs for feed, fertilizer and fuel. This cut into the bottom line for many operations.

Al Kennett, the regional livestock specialist for the MU Extension Service in Ralls County, said it has drastically affected livestock prices.

"For example, feeder calves that were bringing a $1.20 to $1.30 a pound in September of this year are now bringing 90 cents to a dollar a pound," Kennett said. "So it's had a strong effect on feeder cattle prices, and then we'll have a negative price on what we pay for cows and all that produce those feeder calves."

The prices paid for the heifers were lower, but the cost of supplies needed to raise the heifers was higher. That created a smaller margin for farmers and ranchers to operate on.

The higher cost of diesel gasoline during the summer played into the costs associated with farming operations as diesel is needed to run tractors and combines, Kennett said.

The five auctions have achieved higher prices per head as the season has gone along. The first, at the Joplin Regional Stockyards in Carthage, got an average of $1,069. The second was on Nov. 29 in Kingsville. It averaged $1,326 per head. The third and fourth sales were on Dec. 6. Kennett said the sales averaged $1,287 and $1,100, respectively.

Cole said the prices have negatively harmed farmers and cattle producers.

Sophomore Dawn Searcy, a rancher's daughter, said the prices are affecting future farmers.

"It's hard for a young person to get into farming because it's hard to make a living that way, without╩off the farm," she said.

The higher costs brought on by the economic downturn, Cole said, have made farmers and people in the cattle business worried.

"Probably some things will turn out favorable for us," Cole said. "We have lower fuel prices right now and that will reduce some of these costs in the long run. We will probably see a dropping in fertilizer prices and feed is going to probably come down."

Cole said that fuel, feed and fertilizer costs were unreasonable. Farmers and ranchers, he said, need to hope 2009 will be better.

In the mean time, he said, consumers should keep the supply of beef manageably low.

"Keep eating beef," Cole said. "I hope you eat lots of beef."