by: Linda Breazeale
MSU Ag Communications
Mississippi State -- Mississippi's beef cattle producers just experienced the best year in history, and 2015 looks equally promising.
Mississippi State University Extension Service agricultural economist John Michael Riley said droughts in cattle-producing states, especially in 2012, resulted in tighter supplies, while consumer demand for beef has remained strong.
�Each producer has one question to ask before buying an additional cow to expand a herd,� Riley said. �Will she pay for herself in the coming years? The answer will depend on the availability of land and forages, additional labor needs and equipment costs.�
Riley estimated the 2014 value of Mississippi's cattle industry at $397 million, up 33 percent from the previous year. Cattle and calves are the state's fifth largest agricultural commodity behind poultry, forestry, soybeans and cotton.
�The economy continues to improve, which supports higher beef prices at the grocery store,� Riley said. �We know retail and restaurant prices will eventually reach a ceiling for consumers, but farm-level cattle prices should not change directions very quickly when that happens.�
Riley said Mississippi's lightweight calf prices have averaged around $2.50 per pound in 2014. Heavyweight feeder cattle were closer to $1.80 per pound. By comparison, lighter calves were $1.50 per pound in 2013, and the heavier cattle were around $1.25 per pound.
Riley said low prices occurred in 2009 when lightweight cattle were around $1 per pound and heavyweights were around 85-90 cents per pound. Prices started rising even before major cattle-producing states began to experience droughts about three years ago.
Another positive for the industry -- and it is a big one -- is the lower cost of corn and soybeans, the two major ingredients in cattle feed.
�The droughts that caused producers to reduce their herd sizes also reduced national crop yields and drove up feed costs. Now, we've had a couple growing seasons that were much better, contributing to better feed supplies and lower costs,� Riley said.
Brandi Karisch, an MSU Extension beef specialist, said Mississippi's cow/calf operations have had plenty of forage in recent years.
�States with typically large numbers of cattle have reduced their herd sizes because of the lack of forages,� she said. �Now, feedlots can't get enough cattle. Most of our cattle are sold to feedlots that finish feeding them out with grains, which are less expensive than in recent years.�
Karisch said at the beginning of 2014, Mississippi had 18,000 beef cattle operations with 477,000 cattle.
�Cattle are valuable, so producers are taking good care of them and trying to improve genetics,� she said.
Sammy Blossom, executive vice president of the Mississippi Cattlemen's Association, said bull sales have set record prices in the past year.
�Demand for top-quality bulls has grown in recent years, which is evidence our producers are improving genetics,� he said. �Producers see the difference in growing good calves and growing ordinary calves.�
Additionally, cattle producers are working hard to make their land as productive as possible, he said. They are adding more fertilizer or leasing more land to expand forage capacity.
�Most of our producers rely on forages, not grains, to produce calves to send to feedlots in the Midwest,� Blossom said. �The quality of our calves appeals to the feedlots, and they are willing to pay a premium.�
Blossom said the long-range forecast for cattle remains strong.
�Medium to large operations are expanding some. They are retaining heifers if there is no large capital investment necessary,� he said. �Better managed herds will see long-term benefits.�
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