What is in this article?:
- High cattle prices have changed dynamics of cattle industry
- Stocking strategies
Higher feeder and replacement cattle prices in 2014 will have a significant impact on the short- and long-term profitability of cattle operations in South Texas.
Current cattle prices, including replacements, are averaging 20 percent more than a year ago, according to a Texas A&M AgriLife Extension Service study. Availability of young pairs and open cattle will continue to be a challenge for cattle producers looking to rebuild or expand herds.
Historic high cattle prices have changed the financial dynamics of the cattle industry.
Consequently, say Texas A&M AgriLife Extension Service economists, Texas cattle producers looking to restock herds may need to examine more options.
A recent Financial and Risk Management Assistance report outlined several factors for South Texas cattle producers to consider when purchasing replacements. The publication was compiled by Corpus Christi AgriLife Extension economists Mac Young and Dr. Levi Russell; Dr. Joe Paschal, AgriLife Extension livestock specialist, Corpus Christi, and Dr. Steven Klose, AgriLife Extension economist, College Station, also served as co-author.
The Financial and Risk Management Assistance program, commonly referred to as FARM Assistance, is a computerized decision support system developed to perfect methods in risk and decision making for farmers, according to AgriLife Extension economists.
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The economists used a 200-head herd in South Texas as a case study. Costs and returns on management practices were typical of the area. These may and can vary by operators. Ten-year averages were used to analyze and compare net cash farm income. Open heifers, bred heifers, young pairs, old pairs and open cows were evaluated to see which types would generate the most net income.
“As we move forward, higher feeder and replacement cattle prices in 2014 will have a significant impact on the short- and long-term profitability of cattle operations in South Texas,” Young said.
Current cattle prices, including replacements, are averaging 20 percent more when compared to July 2013 prices, the report notes. Availability of young pairs and open cattle will continue to be