Farm And Ranch Report, May 2021 Beef Cattle Prices

Angry Bear's editor writes: This particular post is coming out of Angry Bear’s comment section. Mike Smith is the author. Mike grows various food items on his farm and has a hands-on knowledge of what is occurring in the beef industry today.

What Mike is touching upon today is the small farmer industry and how the farmers are being squeezed out in bringing beef to market. The wholesalers and larger food chains such as Walmart can manipulate pricing to benefit themselves at the expense of small farmers who do not have the herd sizes or grazing capability to support the former and to push back. I will let Mike explain further.

Bulls, Cattle, Cows, Farm, Mammal

Pixabay

As we look at the data coming in for inflationary pressures from around the economy, I wanted to pick one that I have seen some anecdotal evidence to support price gauging by processors particularly in the beef industry that is not due to inflationary pressures, at all. Now, the beef industry is one that has been given very little light over the course of the pandemic.

The beef packing industry has been quick to point out that COVID-19 related response has meant that the processing plants needed to space out, and therefore become less efficient in their processing, in Texas, the trend has been since the beginning of the year to be “let’s go back to the way it was” in pretty much all aspects, and packaging plants are no exception.

Let me get some jargon out of the way:

Stocker – beef cow (any bovine graded for human consumption, gender irrelevant)Ground Portion – Each beeve (beef cow) is roughly 800 pounds and is 200 pounds of ground beef and 220 pounds on average of specialty cuts. The rest is organs, excess and skeleton that is sold off for secondary production such as dog food. Pelts sold for leather. We are focusing on ground since this is almost half the edible weight of the beeves, and arguable the most widely consumed.

Market Levels – Level 1 – Ranch, Level 2 – Wholesale Processor, Level 3 – Retail Grocer. We are only concerned with Levels 1 & 2 which is where the disparity lies. Grocers have been rather consistent.

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