Prices good for beef, hay, grain, potatoes 

By SARA HOTTMAN 

H&N Staff Reporter

December 19, 2010

   For the past two years, they’ve gone to hamburger.

   A persistently bad economy has drawn consumers away from the cut of meat that sometimes tops three figures to hamburger that can be worth cents per pound.

   “It decreases the value of the animal when we’re selling lots of hamburger,” said Chapman, president of the Klamath County chapter of the Oregon Cattlemen’s Association.

   But fewer head of cattle nationwide this year meant area ranchers could still get a solid price-per-pound for their animals — a good thing since many farmers had to pay more to fatten next year’s livestock with grain since grass was in short supply after a bad growing season.  

   For grain farmers, cattlemen’s extra expense is good news for their balance sheets.

   Livestock, hay and grain farmers are in different sectors of agriculture that, with other agricultural and commercial sectors, overlap like a Venn diagram. Their successes and failures impact their circle, but also have a far-reaching ripple effect.

   That ripple favored most Basin farmers this year. Though expenses were up and production was down because of a water shortage, lower production worldwide meant local farmers received higher prices for their products.

   “We have a perfect market,” said Willie Riggs, agricultural economist and director of the OSU Klamath Basin Research and Extension Center. “We force competition in the open market … and that drives prices up and down.”

   Adjusting to the market

   Successful Basin farmers and ranchers constantly tweak their business as the endless variables that affect the market come into play during the growing season, Riggs said.

   “It all evens out (among sectors) over time,” Riggs said. “Not everything switches at once because everyone manages risk differently.”

   Chapman minimizes his risk by retaining ownership of his cattle from birth to death. He sells most of his beef to Country Natural Beef, an antibiotic- and hormone-free brand.

   “We know the animals are high quality and can go direct to the customer,” Chapman said. “It gives us more stability in the market.  

   “We don’t see the highest of highs, but we also don’t see the lowest of lows.”

   For grains, grass and row crops, the risk is higher since the product’s success is directly tied to unknowns like weather and, in the West, water.

   Steve Kandra, a local farmer, decided not to plant wheat this season because of water restrictions. Instead, he leased his fields to row crop farmers.

   So when rampant fires and unusual weather destroyed wheat crops in Russia, one of the leading wheat producers, Kandra cringed. Wheat price-per-bushel skyrocketed, but because of his rational decision five months prior, he missed out on the boom.  

   But overall higher price per bushel, hundred weight and pound for farmers this year affects another circle in the agricultural Venn diagram: consumers, who pay more for food.

   In essence, Riggs, said, “the price of corn takes a dive, the price of pig bellies goes up.

   “It’s all tied together.”