Dale Watson
Commercial Agriculture Beef and Livestock Specialist
University of Missouri Extension




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Please send your comments and sund suggestions to Dale Watson, Commercial Agriculture Beef and Livestock Specialist, University of Missouri Extension, 111 N. Mason, Carrollton, MO 64633, call 660-542-1792, or send messages by e-mail to: watsond@missouri.edu.
For the Week of
October 15, 1998

Value and What It Means

We continue to hear much about adding value to nearly everything agriculture producers have to sell. Just how, where, and when this is done depends largely on the producer and oftentimes differ with individual interpretation and from location to location.

The 1998 year is one that will be remembered by many and quickly forgotten by others due mainly to the low prices and reduced production for many. Seldom do producers hit a year when their fall marketing potential of different enterprises all contribute to generating less cash than is needed. Getting the price squeeze depends on numerous inputs. These vary from the price of pasture rent and grazing rights on government land to wanting more of the market share.

It is difficult to realize why there is such a large swing in the price of feeder cattle and yet we see little or no drop in the price of retail cuts in the grocery stores. I also fail to understand why there is not more reflection in the retail market when we see these wide swings in the inputs, namely the price of feed grains and feeder cattle.

One comment I hear frequently is surviving for another year and hoping the next year will be better. Throughout the Midwest many producers are still recovering from the continuous struggle with the mud factor from the fall of 1997 and continuing throughout the spring of 1998. There are still many scars found on the land left in the feeding areas nearly six months later.

Regardless of any changes or recommendations one thing is sure to surface. The term price reflects the value of retail, wholesale, market share, feeder cattle, feed grains and labor. Reducing the price of retail products would stimulate the movement of retail cuts. The consumer has stated many times that safe food at a reasonable price is what they want. No place in the world can other producers compete with the American farmer or rancher. They are in a total world of food production by themselves.

We must move more product through export trade agreements. This in turn will contribute to the reduction of surplus. We continually hear about becoming more efficient. This sounds great until we look at the cost of our inputs. There is a limit to how far producers can be squeezed. I seriously doubt if feed and packing companies can do much more squeezing. Just remember that the market trend for saleable products needs to flow up and down together to assure that all parties receive their share at the market place.

University of Missouri ExtensionDale's Country Trails - October 15, 1998
http://outreach.missouri.edu/agconnection/DCT/CT101598.html -- Revised: April 20, 2004