Cattle prices hit record highs, but industry doesn't see expansion

Due to high demand and limited supply, cattle prices are the highest they’ve ever been. Montana’s livestock production industry, with roughly 1.5 million cows and 1.2 million calves statewide, is expected to bring in more than $1 billion in gross receipts this year, accounting for 40 percent of all agricultural sales. Accordingly, the price of beef has skyrocketed in just the last few years. For example, at the Missoula Livestock Exchange, 900-pound feeder Herefords — relatively young animals that will be sent to feedlots to fatten up before they are turned into hamburger — will sell for $2 to $2.50 per pound, meaning each animal will bring in about $500 more per head than they did a year ago. However, the boom in prices isn’t leading to a boom in the industry. Due to the high costs of labor, equipment and land, most experts don’t expect a sudden influx of new cattle ranchers to flood the inventory anytime soon. “Ranchers are taking in substantially more money, but everything on the ranch is higher — the costs of tractors, the costs of insurance,” explained Missoula Livestock Exchange manager Craig Britton. “No matter what, sure, the rancher is doing better and he isn’t in the squeeze that he was, but it’s no home run yet. Say some kid wants to be a rancher and wants to be in the cattle business. You want to go spend $1 million on a ranch? It’s just hard.” During the busy season from the beginning of September to the end of March, 1,000 head of cattle are sold every week at the Missoula exchange. Ranchers from all over western Montana and eastern Idaho and Washington bring their animals in, and Britton and his staff sort them and sell them to buyers — usually feedlot representatives from places like Missouri and Iowa...more