Cattle prices skyrocket at sale barns

Farm Forum

When walking into area sale barns, excitement permeates the air. As the sleek cattle scurry through the sale rings, all eyes in the room watch, admiring the well-muscled animals and the premium prices they bring.

Those in the know say current market prices are not an accident; the demand has been building for 3 or 4 years. With the drought, more and more acres of grain were planted, and in turn, fewer cattle arrived at sale barns.

As an example last week, Steve Hellwig at Hub City Livestock sold 374 steer calves weighing 800 lb. at $1.70, one of the best sales he’s seen. He predicts that the market for calves will continue to be higher in the weeks to come.

“I’ve never seen the market any higher,” he said. “We are seeing some really good quality cattle. These are exiting times for the cattle market, we are in way different territory, and it doesn’t matter if it’s bred cattle or feeder cattle.”

The economic benefit to the non-ag economy is huge. South Dakota ranks sixth in the country in livestock production, with nearly 4 million head of cattle. South Dakota’s livestock industry generates $7 billion.

Hellwig said there are are lots of reasons for the changes in the market. First and foremost is that the numbers are so low. With the high grain prices last year and the persistent drought, numbers are down across the United States and in Mexico.

Second of all, with the high grain prices, so much pasture land has been lost. It’s more profitable to tear up the ground to plant crops than to run cows.“Guys can make twice the money farming with half the work. So why raise cows?” he asks.

In the last 3 or so years, as cattle prices have gone down, land has been torn up and farmed, land that should never be farmed.

“There are cycles in the business, and in three years it may be a different story. No one really knows what will happen three years from now.” Most areas got some good moisture this summer, so there are tons of feed out there. The combination of surplus feed with a limited supply of animals has caused this eruption.

The third thing is that people raising cattle are getting older. Young people are finding it is easier to farm rather than work with cattle. Cattle