Dropping prices for cattle hurt farmers Consumption decline, trade treaties blamed

November 24, 1996|By Joanne E. Morvay | Joanne E. Morvay,CONTRIBUTING WRITER

Every Tuesday afternoon, the calves begin arriving for the weekly sale at the Westminster Livestock Auction -- six or eight at a time delivered by livestock haulers or a lone calf secured in the back of a pickup.

Some of the animals scamper into the receiving pens, kicking and bawling as if to announce their arrival. Others -- just a few days old -- have trouble finding their legs and must be coaxed and prodded from the trucks. Most are black-and-white Holstein bull calves sold for veal because they can't contribute milk.

A few years ago, a healthy, 100-pound calf would bring $125 or more. In a good year, a family farm milking a herd of 80 to 90 cows could earn $4,000 to $5,000 or more from calf sales.

But this fall, calves weighing 100 pounds or more are bringing $60 to $65. Those weighing 80 to 90 pounds are bringing $25 to $40 or less.

Beef cattle prices, once $1 to $1.25 a pound, have dropped by more than half, to 45 cents to 55 cents a pound for "feeder cattle" that are raised on a grain diet to increase their weight and meat.

Shannon Reddick, who with her husband, Dan, milks 80 Holsteins and Jerseys at Level Acres Farm in Union Bridge, sold three dairy calves at Westminster recently and earned $26.

"You can't pay your bills with that little amount or even make back what you've already put in the calves," Reddick said.

Balancing losses

She and her husband have been able to balance the losses by selling some of the corn they raised this year. But it's not an even exchange, she said.

And it doesn't help the young couple's plan to buy the family farm from Dan Reddick's parents.

Farmers also are getting even less for "cull cows" that are removed from dairy herds because of injuries or other problems that reduce their productivity.

Six or seven years ago, a healthy cull cow -- one that turned an ankle and couldn't walk through the milking parlor or one that couldn't be bred back to produce more calves -- brought 45 to 55 cents a pound. This fall, auction prices have slipped to 30 cents to 37 cents a pound.

Cull cows, which have less meat potential and usually wind up as hamburger or dog food, bring 20 cents to 25 cents a pound.

Farmers at the weekly auction in Westminster blame the overall decline on everything from reduced consumption of beef and veal to President Clinton's signing of the North American Free Trade Agreement and the General Agreement on Tariffs and Trade.

John Watkins, a Keymar livestock hauler and buyer for more than 30 years, said he believes the trade agreements, which allow meat from foreign-raised livestock to be sold in the United States, have played a role.

Increased government regulation has driven many small meatpackers and butcher shops out of business and reduced the competition among buyers, he said.

But Watkins thinks it was the lure of easy earnings that ultimately destroyed the beef cattle market. "It was too good for too long and too many people got into it," he said.

Agreed Jim Starliper, owner of the Westminster livestock auction and similar operations in Frederick and Hagerstown: "There's too much supply for demand. We had a lot of good years where everybody said, 'I'm going to add a few extra cows and I'll make more money,' but as everybody across the country expanded their herd, then we got in this situation where we're overproducing."

Expensive feed

Complicating things this year are high feed prices.

David Greene, director of the Cooperative Extension Service office in Carroll County, said that beef producers tend to adjust but that he worries more about the current market's effect on dairy farmers.

Greene said flat milk prices, reduced income from calf sales and high feed prices might force some dairy farms out of business.

According to figures compiled by the American Farm Bureau, Maryland has lost 30 commercial dairy farms since the beginning of the year.

"I've never in my 25 years with [the extension service] seen a situation where cull cow and calf prices have been so low for so long," Greene said.

Pub Date: 11/24/96

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