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·Of operation. Of course, that's worse
!han
being unemployed with zero in·
come, but m061 full-time ranche.rs and
feedet$ have too big an investmeot in
laod, machinery, time and labor 10 jusi
"get out» when times are tough. A study
in Nebraska showed that tbe investment
required by a rancbe.r
10
make just
S
15,000 oet income in
a
good year
(1972) was Sl;765.000 of capital and
22,000 acres ofland!
A 33-year-old owner of a large feedlot
in westem Kansas. wbo lost $250,000
last year, said be ligured be could make
tbat back in five 10 seven years i! prices
got straighteoed out. but he felt
sorry
for
the old-timer in the arca wbo bad lost
.wbat he'd taken
a
lifetime 10 buUd and
was too old to recoup his losses. •
The nation's largest feedlot, in
Greeley, Colorado, lost $ 10.8 million
feeding caule d•uing the first
six
months
of 1974. The catüe-feeding industry suf–
fered 19 mooths of devastating losses
tbat approacbed $3 billion, before priees
from slaughter houses finally began im–
proving last April. According to Mon·
fort (of Greeley), "The industry's
financia! problems finally gót brd
enough to create a sbortage of fed
catUe.» Feedlots tbinned their popu·
lation
10
8.5
million - 36% below the
January 1973 peaJe of 13.3 million head.
F....;,
Boom
to
Bust
A rapid íncrease in cattle population
in the late 1960's and early 1970's has,
a«óTdirig
lo
OSDA
Ccooom1sts,
resulted
in an oversupply. Beef population in–
creased aboul
20%
from 1969
10
1974
due 10 the abundanee of low-cost feeds
ahd growing demand for beef. Favor–
able weather through the 1960's and
early 1970's resulted in bumper crops.
Growing prosperity in the industrialized
nations added 10 the demand for grain–
fed beef. As
a
resuh, tbe feedlot business
boomed.
As
Joe Lane Wood, market
analyst for the Texas Cattle Feeder's
As·
sociation, pul it, "In tbe early 1970's, the
speculators took over like
a
herd of
bliod elepbants," investing large
amounts of money in feedlots. Feeder
calves temporarily went as high as
55C
10
70c
per
pound. as feedlots competed
for available calves.
•
Then, in 1972, unfavorable weather
caused
a
poor wbeat crop in Russia.
Tbe
consequeot U.S.-Russia wheal deal
in
the spriog of 1973 triggered a sudden
jump in feed·grain prioes. Com jumped.
82% in a mauer of months and other
foodstuffs as high as
230%
in the same
period. Feed costs normaUy account for
about
80%
of the oost of fauening canJe
for the market. This almost doubled
feeding costs.
Al the same time
all
this happened,
the governmeo1 slapped
a
prioe eeiling
on
beef (tbe firs1 ever) al the consumers'
(votcrs? demand. Evidenlly, American
consumers had decided that the beef
growers should provide tbem with beef
at less Iban cost. Políticians responding
to the power of the vote penalized the
cattle producers.
The packers and merchants, caugbt in
the pincb, drasticaUy cut back their
ac>
tiviues. Sorne of them temporarily shut
down, but caule feeders had no sucb
opti011.
Th~
had 10 cithcr scU at
a
Iou
or continue to feed high-cost grain to
WEEK ENDINO NOVEMBER 1, It?S
their cattle and wait for the prioe eeiling
tn
be
lift~.
Many waited, creating a
temporary beef sbortage, but wben tbe
ceiling was lifted, lbe
back~
of overfat
beef
ftooded the market. dnving prioes
<lown.
Witb feedlots taking
a
beating,
they
cut way back on buying feeder caule.
This caused canJe produeers to piJe up
massive 106Sts. Eveo now, thougb tbere
is
a
sbonage of faueoed catUe, a severe
glut of range canle has
~ept
tbe price
unpro6table sinee late 1973.
The oil crisis and inll.ation in general
added to the woes of the cattlemen,
as
other operating costs went up. along
with the increased cost of livmg. Beef
producers were caught in the jaws of the
wont cost-price squeeze ever lo hit lbe
industry.
·
Sorne of the cattlemen made an
analysis of their problem.s, and they
found tbu not only was the govemment
not offering any help, but they added lo
the ca1Ueman's
woes
by allowing
beef
impon programs
10
hold prices down.
Tbe Nixon administration suspended
quotas limiting meat imports and con–
tinued to keep tbe door open.to foreign
beef through 1974.
Tbe
USDA reponed
in 1974 that beef imports represent
about
7\{,
oftotal domesuc consumption.
A group of East Tex.as cattlemen,
beaded by Billy Joe Davis aod Horaoe
MoQueen, went to Was'hington at their
own expense and cbecked the USDA
records, finding that beef
tuaU,r amoun1ed to
• ccfn"sumprlon in""l973
a miU ion head of live aoima!s imported
from Mexico and Canada and slaugb·
tered in the U.S. were counted as do–
meslic production. Total imponed beef
amounted to ao equivalen! of
6.
7 núl–
lion head.
According
10
John H. Hopkin, bead of
Texas A
&:
M University's Agricuhural
Economic:;, Department, "U.S. cattlemen
must send about 10 núllion cows 10
slaughter Ibis year to reduce the over–
supply and briog it back in balance with
demand, or they will faoe sub$tantially
more perilous times in 1976 and 1977."
lmports have prevcnted the liquidation
of the surplus canJe. Even mucb of the
beef purchased
by
the USDA for school
lunch programs was found to be impor·
ted, despite 1he fact that domestic beef
sbould, by law, be purchased tlrst as
long as it is available. Imponed beef is
oflen not subjected 10 the rigorous in–
spection requirements of domestic beef.
Jt
is
unfortunate tbát agricuhure,
America's largest and most vital indus–
try, is not adequately represented in
government.
lt
could be a serious prob–
lem when 011e beef produeer. wbo pro–
vides the bamburger and steaks for 100
fellow Americans,
is
voted out of busi·
ness by tbe consumers aod
businessme<~
be supplies.
O
Alkn Stout,
D.V.M.,
served aa As·
súl4Jú SúJú
Vekrinarian in
Ongon,
in.
~e
control a.nd era.dica.tion
probkm.s, 1963·1964, ofter
which
he
be<:onu!
Awl4lú Pro{euor in Agri·
cullural ScieMu atAmbassador. Col–
kge, BigSandy, Texas.
For
{urthu
in{ol"nn41ion concerninB
the a.gricultural situation,
wrik
{or
"World Cri8ls
in
Agriculwre,
M
co-au·
thor!d
by
Dr.
Sloul.
Ca.U
~)
423·
4444{or
yo11r
free copy.
The
1974
Rome World Food Conference simply verified what people already
knew - the few
"ha
ve" nations agaln must leed the "have-nots." But how
much
wíll
ít
tal<e?
For
how
long?
And
wíth
what? No one ls sure.
Rnd the answers in the free booklet
World Crisis in Agricultura.
Aesearched
by
the Ambassador College Agríeultural Aesearch Department. the booklet
examines farming's blggest questions-quantity andquallty, economics and
the government.
Requesl your free booklet
World Crisis in Agricultura.
Call800·423·4444"toll-free for
yow
free
booklet
'Callfornoa, Hawaoo and Alaska call (213}·577-5225
--------------------------------
plain
tftlth
Pasadena,
CA.
91123
Pitase sond me lht freo bookl t l,
WORLO CRISIS IN
AGRICULTURE.
AOORESS
ClTY/ STATE/ lJIP
n you are •
PIIJin Trvth
subocfober, please eme<
subscriptoon
number from your
Pl,Fn Truth
maiting label.
P185
1 1 1 1 1 1 1- 1 1 1 1 1- 1 1
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