Demand for beef is up but prices for Illinois cattle producers are down

[May 20, 2021]  By Zeta Cross

(The Center Square) – It is grilling season in Illinois.

Despite the pandemic, the appetite for beef has not been stronger since the mid-1960s.

Cattleman Josh St. Peters, vice president of the Illinois Beef Association, said the COVID-19 lockdowns had many people stuck at home, cooking steaks, roasts and meatloaves.

“Even through the extended quarantine, Department of Agriculture statistics show that beef demand continued to strengthen,” St. Peters said. He said he expects demand to stay robust as the months go on. “At the rate we are seeing orders for beef come in, I think we will see a really strong summer for our beef consumers."

Unfortunately, high demand for beef has not translated into higher prices for Illinois cattle ranchers.

The pandemic created a logjam at meat processing plants. The big four meat-packing companies have lots full of cattle that are waiting to be processed. They are not buying live cattle in the numbers that they usually would. As a result, Illinois cattle ranchers are having a tough time getting fair prices for live animals.

“Prices are weak to depressed – depending on what part of the state you are in,” Peters, who raises cattle in McLean County, said. “The overwhelming majority of any profit in the cattle market today is being taken by the packers – not by the farmers.”

The economic outlook for beef producers in Illinois is giving him “pause,” Peters admits. Beef producers are facing a challenging set of circumstances.

At the same time, prices for animals have been declining, the cost of inputs – the ingredients farmers purchase to make feed – have increased significantly. Corn prices have rallied, and the cost of forages for the beef farms that have to buy their hay or other inputs has significantly increased.

“It takes a very sharp pencil right now to find that break-even point and to find profitability for our beef producers,” St. Peters said. “We are concerned. We are talking with our members across the state to understand what steps can we be taking and what can the industry do to help carry them through these very challenging days."

The Illinois Beef Association is conducting a survey of the 18,000 beef producers statewide on its website, Illinois Beef illinoisbeef.com, to get farmer input. The association wants to determine what policies beef producers would like to see as the association works on their behalf with elected officials. Conversations are underway in Congress to evaluate how the four major packers purchase cattle in the countryside, St. Peters said.