It’s been a scary week for the cattle industry as prices fell abruptly early on and then climbed back up to normal by Thursday. On Friday, they started falling again in the wake of stalled U.S. debt talks.
The turmoil follows a devastating drought and heat wave in big livestock states like Texas and Kansas.
It was a typical scene at Johnson’s Feedlot in Bonneville County as hired-hands worked cows, fed them and put in bids for new livestock.
“In my mind I think one of the biggest risks we have is just our overall economy,” said cattle feeder Robert Johnson.
For most feedlots around the country though, July has been anything but typical.
Hot, dry weather in the South and Midwest caused cattle owners to sell off large portions of their herds.
According to Drover’s Cattle Network, this caused the average price of beef cattle to fall in Kansas to $1.07 a pound earlier in the month.
That price climbed back up by nearly 30 cents and it was up again all over the country. On Friday, it was slipping again.
The drought is also turning hay and feed into hot commodities.
Even though cattle ranchers in big cattle states like Texas are selling off livestock to cope with the heat, Johnson said when the weather evens out they’ll need to purchase replacement cattle.
Johnson said it’s probable Idaho will benefit from selling replacement cattle to weather-hit states.
This could have the price of beef in the stores going up, which Johnson fears could have consumers buying more chicken.
“Regardless of supply and demand, if the price of beef gets too high, when is the consumer going to balk?” said Johnson.
Tropical Storm Don is expected to make landfall in Texas early Saturday, potentially bringing some much needed rain to that state. It’s still just a drop in the bucket after a parched spring and summer.