May 26, 2000 | By: Mark Eclov
LEXINGTON, KY.

It has become a boom time for cattle prices, but are Kentucky cattle producers poised to take advantage of the good prices?

Recent USDA figures suggest that cattle prices are not only high, but they are going to go even higher and should remain on this trend for the next three to four years.

"Beef production is currently high but that is just because of last year's carry-over stock," said Lee Meyer, Extension livestock marketing specialist in the University of Kentucky College of Agriculture. "As these calves are harvested, production is expected to go down and should remain down for two or three more years and cattle producers will continue to see good prices."

Meyer warned a recession could quickly bring the good prices to an end through less consumer demand and, if the drought continues in the corn belt, higher feed prices would cut the demand for calves and then all bets for better beef prices are off.

But if the current trends hold, how can Kentucky producers take advantage of the current high market prices?

"The key for Kentucky feeder cattle producers is to plan carefully and expect the prices to start going down within a three-to-five year time frame," said Meyer. "Any kind of scenario that is based on continued high prices for cattle is going to get you in trouble."

Producers are urged to have a long-run plan and build flexibility into the beef cattle operation. It is recommended that most Kentucky producers should have a cow-calf operation with the option of having a way to keep their calves past weaning to a backgrounding program of some sort.

"These programs can then be adjusted according to the market situation," noted Meyer. "So if the price of calves go down you can retain ownership and gain some of the value back, but you do not want to be locked into a backgrounding program because if the price of calves is high, it is better for most people to send them to market."

On the production side, beef operators should consider raising the value of their product by improving herd genetics through the choice of a good herd bull.

"Reproductive efficiency is also important," added Meyer. "If you only get seven calves out of 10 cows, your costs are going to be much higher than the manager who is getting eight or nine calves from a more efficient group of 10 cows."

A quality feeding program is essential to additional profit. Meyer said rotational grazing seems to be the key along with improving the quality base of the forage.

"It doesn't have to be an intensive grazing system, " said Meyer. "Just breaking up the current pasture into three or four smaller fields will have a major impact for many producers and is a simple way to begin."

Contact: 

Lee Meyer 859-257-7276