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Ranchers' dilemma: Costs increase and cattle prices decrease
Published January 9, 2009 at 8:47 p.m.
As ranchers prepared for the start of this year's National Western Stock Show, it didn't take too long before talk turned to the economy. More specifically, how it is taking a toll on their livelihood.
Here are a couple snapshots.
A black Gelvieh cow from Brandon McEndaffer's family ranch was getting a trim Friday morning as owners readied their breeding animals for show in the National Western's Hall of Education.
The New Raymer- based operation, like other farms and ranches, experienced one of the most volatile years in recent memory. High fuel prices boosted the cost of the supplies it needs to grow wheat and feed cattle.
"The only thing that saved us is oil prices coming down," said McEndaffer, whose parents Guy and Rose operate the family business. "I don't think the economic impact (on consumers) has trickled down yet. It's going to have an effect down the line because the disposable income for higher-priced goods will be reduced.
* * *
Bill Wilkinson ranches in the tiny southwestern town of Model. But he figures much of his livelihood depends on whether urban folks head to Morton's or other steakhouses to splurge on dinner.
"A lot of our high-end cuts are driven by discretionary spending," the rancher said. "It's all about emotion and everybody's feeling bad."
The cost of everything from fuel to feed and even fencing material has made it far more expensive to raise cattle.
"We have at least seen a reprieve in fuel prices," Wilkinson said. "I really believe that if people can start feeling good about something, maybe we can start turning this thing around."
* * *
Sebastian is not quite 3 years old, but he already weighs more than 2,300 pounds.
The jet black bull rolled from side to side in his stall as his owner recounted the roller coaster ride of 2008.
"We'd been riding cattle prices that were just out of sight," said Mike Purswell of Y2K Ranch in Elizabeth. "Now they're down at least 30 percent, maybe 50 percent. Almost everything in this barn is worth more alive than as beef."
Purswell has modest hopes for the coming year: "Considering the state of the economy it's impossible for me to conceive that cattle prices will go up. I'm just hoping they won't fall all way through the floor. Anything's possible.
* * *
With hay prices going "through the roof," the Banwarth family could no longer justify keeping cows on its property in Adin, Calif.
"The hobby's always paid for itself until now," said Kathie Banwarth, whose husband, Kevin Banwarth, works as a general contractor in their northern California outpost.
The cows were consuming about $500 worth of hay apiece to get through the winter, prompting the family to sell most of the herd.
They did hold onto two of them, both belonging to their 10-year-old daughter, Megan. Wearing a "Cowgirls Kick Butt" sweatshirt, she was busy grooming her two Red Angus critters in the Hall of Education Friday at the National Western Stock Show.
Her long-term goal: to become a veterinarian. For now, though, she has one thing in mind: making sure her cow becomes the "Grand Champion."
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