Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, July 8, 1994 TAG: 9407080067
SECTION: VIRGINIA PAGE: B-3 EDITION: METRO
SOURCE: By DAVID REED ASSOCIATED PRESS
DATELINE: BEDFORD LENGTH: Medium
Cattleman Bill Herndon stretched his elbows to his dusty khaki pants so the buyers sitting across the aisle could hear him above the auctioneer's imploring cant.
``Do I hear five-fifty-five-fifty-five-fifty ... ?''
``Those are good cows,'' Herndon said as his Hereford and calf nervously circled the pen at the Springlake Livestock Market, a whip snapping above their heads. ``That's her second calf. She'll do good for you.''
But the pair sold for about $200 less than they would have brought him two months ago, Herndon said.
``That's awful damn cheap for those cows,'' Herndon complained, crossing his arms as the cows were prodded through a gate.
Prices for Virginia's most valuable commodity have been steadily dropping because of an oversupply of cattle. The U.S. Department of Agriculture said red-meat production hit a record in May and beef cattle prices in June fell to $63.60 a hundredweight, the lowest in six years.
The department added to the price problem last month by suspending Virginia's status as a tuberculosis-free cattle market because of an outbreak of the disease in a Floyd County herd.
The status lets Virginia farmers truck their cattle out of state without TB testing, which saves them thousands of dollars in fees.
In addition, Jim Johnson, a field man for the Virginia Cattlemen's Association, said the perennial shortage of trucks for shipping cattle is worse than ever, which means some buyers will be unwilling to bid on Virginia cattle.
``It's like seeing a great deal on a pool at Wal-Mart, but you don't have any way to get it home,'' Johnson said. ``Buyers have to sit on their hands.''
Cattle raised in Virginia and sold to other states brought $344 million in 1993, so a lean year for the industry will have a ripple effect in the state economy, Virginia Tech animal science Professor Ike Eller said.
Eller said the Virginia cattle industry has had relatively good years since 1987; this is just a cyclical adjustment in the market, he said.
``We hope what we're seeing now is the bottom of this thing, but nobody knows,'' Eller said.
But Perry Dews, a livestock dealer from Hurt, said, ``It's kind of like the October crash of the stock market'' for central Virginia farmers.
They're getting about $57 per hundredweight, nearly $20 less than last year. They're losing $135 to $210 a head for feeder cattle, after figuring in the cost of feeding and taking care of the animals, he said.
Herndon, who has been raising cattle near Natural Bridge for 35 years, said the price drop ``is probably the worst drop percentagewise since 1972.''
``It's tough to survive now. How would you like it if all of a sudden you're getting half of your salary? That's what it's like,'' Herndon said.
Eller said that ``Everyone's crossing their fingers'' and hoping prices rebound and the state gets its TB-free status back before fall, when 60 percent of Virginia's cattle are sold.
``If it really gets cheap this fall, a lot of people will have to get out of the cattle business,'' said Albert Epperly, manager of the Springlake Livestock Market.
One young farmer in Appomattox has run out of grass already because of the dry weather and, because of the high cost of supplemental hay, he plans to sell his entire herd at the market in two weeks, Epperly said.
C. Wayne Ashworth, president of the Virginia Farm Bureau, complained two weeks ago that the price of beef in the supermarkets has remained about the same despite the reduction in the price of live cattle.
``Consumers would benefit from lower beef prices, and increased sales will stimulate demand for beef products on the wholesale level,'' Ashworth said.
But economists generally believe consumers will encounter beef specials rather than steady price declines at the supermarket. Retailers want to wait out the market before setting prices too low.
Predicting cow and beef prices is like predicting the weather, said Campbell County cattleman Walter Hawkins. ``I don't believe anybody knows what they're going to do.''
Hawkins, a spectator at Saturday's auction, said he sold a batch of cattle in March when prices still were high. ``We got really lucky. It's just a guessing game.''
by CNB