July 17, 2014
On Saturdays at the Worthington Farmers Market, Licking County rancher John Wiley sells every piece and package of beef he brings.
Thanks to historic high prices for both beef and live cattle, Wiley’s grass-fed cuts aren’t cheap, but that hasn’t hurt his sales, and he’s working to produce more.
High prices, unrelenting demand and decent weather have Ohio’s cattle herds once again on the rise. Buckeye ranchers added 2 percent to their stock this year over last, one of the few states to do so, the U.S. Department of Agriculture said.
But unlike businesses that make toys, cars or computers, adding production capacity at the ranch level isn’t as easy as throwing up a new building or contracting with another manufacturer. It’s complicated by fickle markets, biology and weather, say Wiley and other experts.
Beef is a different sort of animal.
Americans have a love affair with beef, and insatiable demand in a headwind of historic prices proves it.
“We’ve seen demand continue to increase,” said Darren Tristano, executive vice president of Technomic, which tracks the restaurant industry. “Consumption is up. Consumers like their beef and burgers.”
The U.S. beef herd has long been in decline. The nation’s herd size peaked in the 1990s and has lost 38 million head since. It is now as small as it was in 1951, when there were half as many Americans to feed, according to USDA and U.S. census records.
Recent droughts — the widespread calamity of 2011 and the current rainfall deficit in the West — have prompted ranchers to cull millions from their herds because they have become too expensive to feed.
“We are starting to see signs of some hints toward expansion,” said Elizabeth Harsh, president of the Ohio Cattlemen’s Association. “Ohio has been fortunate. ... We have been in a different weather pattern. Beef producers are at the mercy of Mother Nature.”
Ohio’s pasture and range lands are in good shape, with 93 percent in fair to excellent condition, according to the USDA’s latest crop report. In major beef-producing states such as Texas, Kansas and Colorado, 20 percent to 35 percent of pastures are in poor to very poor condition. In California, the report rated 75 percent of pasture as poor to very poor.
Partly because of good grazing conditions, Ohio’s ranchers kept more heifers (young female cows) to breed and are looking to grow their herds as their operations allow, Harsh said. Wiley has added 20 cows to his operation, Up the Lane Farm, through the past couple of years, but he is now at capacity.
Wiley said his fellow ranchers struggle with the decision to cash in their cows at today’s prices or hold a few back and grow a bit to see if tomorrow brings even better returns.
“Some of these guys are more likely to hang on when the prices are up,” Wiley said. “The animals are worth so much money, it is almost too expensive to turn them into meat.”
Calves are sold by weight, and weigh between 450 to 800 pounds. Prices for calves in June 2013 ranged from $640 to $1,000, the USDA said. This June, prices ranged from $1,000 to $1,600.
“We keep raising our (retail beef) prices to keep up,” Wiley said. “But everything we do keeps costing more; everything from hay and the price of calves. I would say it has doubled in about five years.”
Because of the high price of calves and low herd count, fewer animals are being sent to slaughter this year, the USDA said. Harsh and Wiley agree that there are fewer cows at local processors.
If true expansion happens, it’ll come slowly.
“Predictions aren’t for a rapid expansion anytime soon,” said Stephen Boyles, a beef expert with Ohio State University Extension. “I see interest, but I’m not sure I have seen a lot of action."
To hold back a heifer to expand a herd through breeding and raising a calf is a two- to three-year commitment, Boyles said. That is a long-term investment without a guarantee that prices will remain high. Just buying a calf and raising it for slaughter takes 12 to 18 months.
Wiley said his customers often ask why he doesn’t bring more meat to the farmers market when he knows he has a strong customer base.
“What I tell people is that the animals I have now are the ones I bought two years ago,” Wiley said. “I didn’t know you’d be here two years ago.”