Calves raise record prices

During nearly 50 years of ranching, Lee Williamson has never seen feeder calf prices as high as this fall's.

He sold the last of his feeder calves in Fort Collins earlier this week. At 508 pounds, his heifers sold for an average of $565. At 522 pounds, his steers sold for an average of $595.

Across the state, ranchers are earning $50 to $60 more per calf than they made in previous years. That's a substantial gain for ranchers in the cow-calf business, said John Campbell, owner of Winter Livestock in La Junta, the largest cattle auction in Colorado.

"Prices have been at record levels throughout the fall," Campbell said.

Williamson credited the high prices to the continuing popularity of Atkins-style low carbohydrate diets and the prohibition of live cattle imports from Canada, where mad cow disease was discovered more than a year ago.

Along with those factors, low numbers of cattle and ample feed are driving the competition in the feeder calf market, Campbell said.

During 2002's severe drought, ranchers were forced to cut their herds, and many still haven't rebuilt to their former numbers. With only 2.4 million head of cattle in Colorado, the cattle population is at its lowest since 1966, according to the Colorado Division of Brand Inspection.

Although the drought was bad in Northwest Colorado, this corner of the state wasn't hit as hard as southern Colorado, giving ranchers here an edge against competition in other regions.

Moist weather in Kansas, Oklahoma and parts of Texas has produced good conditions for growing winter wheat. Corn is also cheap and plentiful, and hay is at reduced prices, Campbell said.

Feedlot and wheat pasture owners are taking advantage of these conditions to purchase feeder calves and fatten them for a profit, the auctioneer said.

At Campbell's auction house, prices have climbed as high as $1.50 to $1.62 per pound for 400-pound steers.

Last year at this time, prices topped at $1.35 per pound for 400-pound steers.

The high going price for feeder calves isn't hurting the buyers, either.

Jim Showalter purchases feeder calves for Power Genetics, an alliance of cattlemen based in Nebraska. The high demand for beef allows beef producers to pass the prices down the line, he said. That's why beef costs are high at the grocery store now.

When Showalter purchases cattle, he loads them directly on a truck for shipment to Nebraska. Expensive fuel is having its effect, he said.

"The only thing negative this fall is the high price of diesel. The fuel freight rate is terrible," Showalter said.

Last year was also a good year for the cattle market, said Kathleen Kelley, vice president of Ranchers-Cattlemen Action Legal Fund. R-CALF represents thousands of cattle producers on international trade and marketing issues.

The drought created the worst downward cycle the cattle industry has seen, and prices fell to less than Depression-era levels, Kelley said. Many ranchers had to diminish their equity and increase their debt to stay in business.

"We've got to have a number more years like this to get through the numbers we've just been through," she said.

Williamson questioned how long the wave of good calf prices would last.

"It sure doesn't hurt anything, but I've seen cycles before this. The beef herd builds up, you get an oversupply and the price goes down," he said.

Rob Gebhart can be reached at 824-7031 or rgebhart@craigdailypress.com.

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