High as beef prices are, they haven't risen enough to cover the real costs of real cow-calf operations.
The true costs of raising a weaned calf last year were $786, when you add in the expenses for non-producing animals in the herd, says Stan Bevers, Texas AgriLife extension economist. Bevers maintains the Standardized Performance Analysis (SPA) database for the Southern Plains, which currently includes actual costs and returns for about 75 cow-calf operations in Texas, Oklahoma and New Mexico.
For example, a 500-pound steer bringing $1.44 per pound is only worth $720. A 600-pound steer bringing $1.35 is worth $810, or a measly $24 profit.
Bevers says the numbers in his database also tell him a replacement heifer actually costs about $1,050 to develop and on the average, cows never pay for themselves until they are sold as culls at the end of their productive lives.
Prices must get higher before we could have the herd expansion everyone is asking about. And yet, at some point, consumers will balk at rising beef prices.Hear what Bevers has to say by using the audio player above.