In late June, there was a set of 450 grass steers averaging 990 lbs sell for $1.98/ lb in an internet sale with direct delivery to an Alberta feedlot. That works out to $1960/ steer and $882,000 for the entire set of steers. In the same sale there were lots of groups of 850 weight steers selling for $2.10- 2.12/ lb. I maintain that we are not getting over paid with these prices. It is just that we are not used to them. Stop and consider what everything you have to buy for your cattle operation cost a few years ago, and what they cost today. As a neighbor of mine said recently, he purchased a new JD round baler off the dealer's lot in 1978 for $5000. He priced a new JD baler from the same dealer this year and it was $62,000. He said it had a few more bells and whistles than the 1978 baler had but the end product ( a round bale for his cows) still looks pretty well the same.
I read a sale report a couple days ago of 870 weight steers from Burwell, Nebraska selling at $2.38/ lb or $2070 each.
I am thinking that we are going to see lots of fluctuations in prices over the next few months but we are not going to see the poorer prices of years past... at least for a few years. There was a pile of herd dispersals last year here and I have heard the fall bred cow sales have been full for over a month. We have a lot of older producers who have decided this is the time to sell their herds. They were going to have to do it within the next 5 years and with the prices now, they are thinking they better get what they can when the times are good.
I have heard 2 reports of commercial cow - calf pairs selling for $4000. but I have not been able to confirm if it is true. I do know that there were 24 pairs offered in the internet sale I mentioned above, which was held in late June, and none of these pairs sold as the reserve of $3000 was not met.
So what do these commercial prices make a good purebred replacement female worth? I was talking with a purebred producer this morning, who was telling me that he was asked what he would sell some heifers and cows for. He told the guy that with markets today, they should be worth between $5000- $10,000. He said the guy did not flinch and told him to see what he could come up with for $30,000. The times we thought we would never see may be upon us!
In regards to the consumer not buying beef if it gets too high, I think that may be a short term event. Our consumers have benefited from cheap food for decades and we may have a little adjustment time here. We had an Australian couple visit us last weekend and they were saying that Australia can hardly keep up to the demand of beef from China. They said if Chinese beef consumption were to rise by 1% per person, that Australia would not be able to supply it. I asked the manager of the meat department in a supermarket here, yesterday if he had seen any changes in beef sales yet because of the higher prices of beef. He said that actually their beef sales were higher this year than last year, especially on the higher priced cuts like steaks. I asked him if he thought this would change and he felt that it may drop off when the bbq season ends, but it may stay strong through the year as people may have adjusted to the higher prices by then. The first people to reduce their beef purchases will of course be the low income families, but in reality, they were not very big beef purchasers in the past either.
