GARDEN CITY, Kan. (KSNW) – There could be good news for some in the Kansas ag industry. The USDA projects net incomes for producers will go up” by 13-percent this year, due largely to the cattle sector.
But for some, it’s not time to celebrate.
“The cattle industry has had some pretty good times the last few months, but that came off of a pretty severe loss before that,” said Garden City rancher Lee Reeve.
Part of that loss had to do with deaths and weight loss caused by the Clark County fires and the late-April blizzard.
That drove up beef prices earlier this year before the number of cattle ticked back up.
“Our exports have been excellent,” said Reeve, “and our domestic consumption has been excellent. It’s just that we’ve just got a lot of beef.”
That’s driven down beef prices again.
“I don’t know if we’re at the bottom, but we’re at the bottom end of the range,” said Reeve.
Beef prices are low, but the customers remain. While incomes are expected to rise this year, its relative compared to recent low incomes, and Reeve isn’t celebrating.
“You know the grain markets haven’t been very good, so you’re talking about going up by 13 percent off of a smaller number, so it might not have the magnitude that it might sound like at first.”
While falling grain prices have hurt farmers in recent years, it’s also made it less expensive for ranchers to feed their livestock.
“If those prices are down,” said Reeve, “then that helps us, because one of our key ingredients is cheaper.”
He said in a global market, he can’t predict what will happen next.
“If there’s a drought somewhere in the world, it will affect us.”
This news of rising incomes comes as farmers are about to plant their wheat crop. As KSN reported last month, farmers this year are planting historically low acres of wheat in favor of more profitable crops.