From the Ground Up: Beef Market Plummets
Since the nation’s beef cattle herd had already hit its peak as far as the size of the herd, cattle prices were projected to slowly rise this year, but that was prior to the coronavirus. Since the first of the year prices have dropped almost three hundred dollars per calf, even though demand for beef remains good. But markets don’t like uncertainty. Jerry Armstrong operates a stocker operation in Lee and Burleson Counties, which means he takes weaned calves and puts weight on them to ready them for a feedlot.
“The core reasons for the price to fall haven’t changed. It’s just simply a, the market and investor money or hedge money or whatever it is, doesn’t know what to do right now. But the fundamentals of the industry really haven’t changed.”
Armstrong believes that people are still going to be eating beef.
“I think we’ll see some difference in what cuts of meat maybe, because people are eating at home more and they’re not eating out. We may not have the demand for prime steaks as much as we would like to have or that we’ve had in the last year or two if people aren’t able to go out. But they’re still going to want to eat meat.”
Armstrong says that he is very cautious about what’s going to happen and that requires him to manage their operation in a more cautious manner.
“But I’m not scared that we’re going to go out of business right now. We have a job to do. There’s going to obviously be supply chain issues go on and that’s going to make our job tougher I’m sure, so those are the things that I worry about more than whether we’re going to be able to sell our product. It’s are we going to be able to produce it as well as we have, or as well as we should because we’re going to have difficulty in getting some supplies that we may need, and we don’t know what that may be yet.”