Decreased competition holds market prices steady

By SARA HOTTMAN

H&N Staff Reporter

November 18, 2010

      Klamath Livestock Auction held its last feeder sale Tuesday, capping the fall auction season and starting the winter with solid prices.

   “Prices are good,” said Pat Goodell, owner of the auction site. “They’re a little higher this year than last year at the fall feeder sale. … There seems to be a good demand for cattle.”

   This year, Klamath County ranchers faced an odd selection of issues — bad economy, cold weather, limited irrigation deliveries, fewer cattle nationally — but the pros and cons balanced out for higher price-per-pound of beef, said Jason Chapman, president of the Klamath County chapter of the Oregon Cattlemen’s Association. He has 350 cattle in the Poe Valley area.

   Types of markets

   Feeder sales are aimed at buyers who buy truckloads, enough animals to total about 50,000 pounds, at a time.

   Regular sales, which don’t market to mass buyers, will continue Tuesdays through Dec. 21, and then resume after a holiday break.

   Most ranchers who have 80 or fewer head market their cattle through the auction yard, Chapman said. Of the ranchers with more than 100 head, about 70 percent do video sales — selling them in a virtual auction — or sell directly to a feedlot. The other 30 percent sell cattle for processing.  

    Business hurdles

   For the past two years, consumers have pinched grocery money because of a bad economy, which translated to a demand for cheaper secondary cuts like hamburger and roasts.

   “When you’re marketing a carcass, secondary meats … are normally what you have left over and you have a hard time selling those cuts of meat,” Chapman said. “The steaks, you have a hard time keeping them in stock. For the past two years that’s been reversed.”

   On the retail side, meat prices have risen steadily over the past few years, said Jordan Howard, assistant manager at Howard’s Meat Center on South Sixth Street. Hamburger meat always sells more during the summer barbecue season but, he said, there’s little demand for expensive, high-end cuts.

   Retail price reflects the amount processors paid for beef, as well as increased transportation, processing, inspection, labor and packaging costs.

   More demand for cheaper meat means cattle are worth less per pound. But at the same time their worth decreased, the number of cattle nationwide decreased (in Klamath County numbers remained the same) so the price was steady, Chapman said.

   Ranchers also had more feeding expenses after water shortages and a cold spring delayed grass growth. The cattle didn’t put on as much weight during the summer, forcing producers to provide hay sooner and increasing expenses, Chapman said.