Cattle prices are soaring, but Oklahoma ranchers are still struggling.
Feeder steers, which are sold to feedlots to be fattened up for slaughter, sold for $6 to $10 more this week than they did last week, according to figures released Tuesday. Prices have been increasing for the past few months.
“It’s simple — supply and demand,” said Michael Kelsey, executive vice president of the Oklahoma Cattlemen’s Association.
The demand for cattle, beef and dairy hasn’t declined, but within the past few years the supply has decreased dramatically, he said. Herd numbers are the lowest they have been since 1950.
The state’s long-running drought has damaged food and water supplies, resulting in many ranchers selling off their cattle. But the drought isn’t a sole culprit.
“It’s a big impact, but it’s the last of several impacts,” said Derrell Peel, Oklahoma State University agribusiness professor.
Since the onset of the drought three years ago, the state’s cattle population has declined by 2 million, Peel said. But cattle numbers have decreased for 16 of the past 18 years, he said.
Myriad factors have slowed production, Peel said. The recession prompted consumers to buy less retail beef. Decreased demand drove cattlemen to produce less. Feed prices grew tremendously in 2007 and many couldn’t afford to maintain the herds, so they sold cattle to downsize.
Because of the low supply, prices have spiked.