Raising cattle for profit hasn't changed much, Mitch Wilson said, but the checks you write have gotten bigger.
"They just cost a lot of money," said the farmer and rancher from the Carlton area in southwestern Dickinson County. As cattle were auctioned Thursday at Farmers & Ranchers Livestock Commission just west of Salina, fetching astronomical prices, Wilson munched on a hamburger and fries in the cafe adjacent to the auction ring. "I don't think that cattlemen are getting any more money," Wilson said. "They're working with the same difference." At the sale ring, manager Mike Samples was amazed at the prices people were paying during the regular Farmers & Ranchers stocker-feeder sale. A 500-pound steer sold for more than $2.40 a pound, he said, and a set of steers weighing in the 600s brought $1,414 apiece. "That's just unheard of," Samples said. "It's a new era, a time we've never seen before." Cattle scarce The cattle price is way up there right now, said Carl Garten, Extension director for Saline and Ottawa counties. That's because there aren't many available to buy or sell, he said, thanks to drought and feed costs in the past couple of years that prompted producers to liquidate some or all of their herds. "If you go to the sale barn, you can invest a lot of money in a hurry," Garten said. He reported that cattlemen are paying in the range of $3,000 for a cow, one of the essentials in growing an operation, and baby calves -- not yet weaned -- are bringing $500 to $600. Garten reported one recent sale of 500-pound cattle for $2.27 a pound, or $1,135 per animal. "It's never been this high," he said. Record prices Prices these days are setting records, said Anthony Ruiz, of Minneapolis, an Extension agent in livestock production. History shows the inflation. A 500- to 600-pound steer brought 91.76 cents a pound in 1992 and nearly $1.70 a pound in 2012, according to an Iowa Extension spreadsheet. In 1980, feeder steers from 650 to 750 pounds were bringing 75 cents a pound. Another factor in the high price is the "phenomenal demand" that beef is enjoying overseas, Ruiz said. "The question is, where does it stop?" he said. "It's going to take at least three years until we get enough cows back in our pipeline to offset the demand. That's the best-case scenario." When a young cow is commanding such a price, it's difficult for producers to hold back heifers from the sale to replenish their herds, Garten said. "If you have to rebuild, you've got to start someplace," he said. Beef prices increase The U.S. Department of Agriculture placed the overall average retail value of beef at $5.28 a pound in February, up from $4.67 a pound in March 2012, and an average of nearly $3.97 a pound in 2008. The average of all fresh ground beef in February 2004 was $2.69 a pound. It was $4.03 a pound in the same month last year. "That's sticker shock when the housewife goes to buy food for the family," Ruiz said. Cattle sales lively Thanks to the record prices, Samples said the livestock sale was heavy on cattle through the winter and so far this spring, but's that's going to change. "Numbers are going to start depleting real quick from a shortage of cattle," he said. "A lot of people have sold early because of the markets. We're going to get shorter on cattle." Don't think that cattlemen are getting rich, Wilson said. While he enjoys the business, it's still a gamble. It's a gamble Wilson's 914-pound cattle -- which will be purchased and fattened to slaughter weight of 1,450 to 1,500 pounds at a feedlot -- were selling for roughly $1.59 a pound Thursday. He replaced those cattle two weeks ago with 470-pound steers for $2.11 a pound. "If I bought them today, I'll bet they would cost close to $2.25," Wilson said. A lot can happen in the 200 days it will take to feed them to 900 pounds and return to the sale. "What's the market going to be in 200 days?" he said. "In the cattle business, there's death loss, medicine, what it costs to put on a pound, and the price in the future. There are a lot of variables out there. "Hindsight will tell you whether I'm right or wrong." -- Reporter Tim Unruh can be reached at 822-1419 or by email at firstname.lastname@example.org.