Sort & Cull

By Jennifer Carrico, DTN Senior Livestock Editor, and ShayLe Stewart, DTN Livestock Analyst

Editor's Note: The views and opinions expressed in this Sort & Cull column are those of the authors and do not necessarily reflect the official position or policy of DTN/Progressive Farmer.

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Beef producers have always been independent in their ways and their work, which is why, when President Donald Trump said on Friday that he was working to bring beef prices down, there was a flurry of discussion among those in the cattle industry.

For those who might have missed it, Trump made the following comments to reporters during a press conference at the White House on Friday: "We are working on beef, and I think we have a deal on beef that's going to bring the price (down). That would be the one product that we would say is a little bit higher than we want it, maybe higher than we want it, and that's going to be coming down pretty soon too. We did something, we worked our magic."

Just a couple weeks ago, Agriculture Secretary Brooke Rollins said the Trump administration would "incentivize" ranchers to expand the national cattle herd, but not with payments. That makes one wonder what they've had in the works and how working to lower beef prices in the store helps beef producers.

Yes, beef prices are record high both in live cattle and in the grocery store. But didn't we all learn about what drives prices in economics class? The 2025 beef calf crop is projected to be the lowest since 1941. Beef feedlot supplies are low. Beef cow numbers are low. It's a supply and demand-driven market. Beef demand is at a 40-year high.

Many factors have played a part in getting numbers down this much. This mostly started with extreme drought in cow-calf areas that was matched with high input costs and the increasing age of the producer. Producers have culled cows because they had no feed, and now, with prices high, they are continuing to send heifers to the feedyard. This means a definite slowdown in rebuilding the cow herd. Even if every beef producer kept every heifer in their herd to increase numbers, the impact wouldn't be seen until 2029. That's how long it would take for heifers to reach breeding age, then gestate, give birth to a calf, and then the calf to grow, go to a feedyard and then be ready to harvest for beef.

And importing more beef isn't the answer either. Are we sure all the countries importing beef have the same safety standards as we do in the U.S.? Do we know whether the quality of their beef is as good as ours? We likely all know the answers to those questions.

Then, let's really look at the price of beef and what you get for that. If 1 pound of hamburger costs $9.99, you can make four quarter-pound burgers from that pound, which would feed four people. In that beef, you are getting zinc, iron, protein and essential vitamins for a heart-healthy diet. How many of the people complaining about $9.99-per-pound hamburger are also going out and buying a $3 candy bar, a $3 soda pop or a $6 cup of coffee. What are the nutrients you get from that?

ANNOUNCEMENT AFFECTS MARKET PRICES

The comments made by the president on Friday were both gut-wrenching and crippling to the cattle complex. Most feeder cattle contracts closed limit lower (down $9.25), and the live cattle contracts plunged anywhere from $6 to $7 lower. If these comments hadn't been made, there is a strong likelihood that both the live cattle and feeder cattle markets would have closed higher on Friday afternoon, as both markets had successfully reached new all-time highs in most of their contracts earlier in the week. Fundamental support was also pouring in the marketplace, as fed cash cattle prices traded at $372 in the North, which is $9 higher than the previous week's weighted average, and at $240 in the South, which is $5 higher than the previous week's weighted. The CME feeder cattle index also reached a new all-time high on Thursday, closing at $375.10.

No one knows exactly what trade deal may have been made, but it's safe to speculate that some arrangement could have been made with Argentina while their President Javier Milei was at the White House earlier in the week to discuss trade and financing to help support that country's economy. And while it's true that record beef prices are pushing some consumers to cheaper proteins, we hope the long-term implications of this potential type of government interference aren't overlooked.

Why is it that beef has to remain "affordable" at the cost of cow-calf operations? Again, one of the main reasons the U.S. beef cow herd sits at a multidecade low is that cattlemen couldn't afford to operate any longer in the market's previous environment. Supplies surpassed demand, which negatively affected feeder cattle prices. All the while, the government never stepped in back then and told large corporate feedlots or any of the major packers that they were making too much money and something needed to change.

If the government steps in and hinders the cyclical way in which the market flows, there are two things that we want to be very clear about. No. 1, the government is affecting true price discovery in the marketplace and all but saying who can and can't be in control of the market's leverage. And, No. 2, if the government steps in now to make beef "affordable" to consumers, will they then be at the beck and call of cow-calf producers seeking help when the market turns and those producers no longer see profits?

Former President Ronald Reagan is likely spinning in his grave, as he once said, "The most terrifying words are, 'I'm from the government and I'm here to help." That quote rings as true today as it did then.

We are both cattle producers. Our families have been in the business for many years, and we plan on that continuing for many generations to come. Why are cattle producers expected to be poor? Let the market fluctuate as it's going to; we don't need the government stepping in.

It's time to speak up for our industry and our families' livelihoods. Let's let Washington know this isn't the right move.

Jennifer Carrico can be reached at jennifer.carrico@dtn.com

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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