ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, February 8, 1996 TAG: 9602080047
SECTION: BUSINESS PAGE: C-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
The number of cattle and calves on Virginia farms increased 3 percent from January 1995 to last month, outpacing the nationwide gain of 1 percent, the Virginia agricultural statistics service reported this week.
Despite the summer drought and poor pastures, the state was home to 1.8 million cattle and calves on Jan. 1, or 50,000 head more than a year earlier, the agency said. Nationwide, cattle and calves totaled 103.8 million head.
The statistics service attributed much of the increase to last year's low cattle prices, which prompted farmers to hold onto younger stock longer rather than sending them to slaughter markets. Steers of 500 pounds or more, for instance, increased by 9 percent from a year earlier to 195,000 head.
Farmers have felt lucky that cattle numbers increased no more than 1 percent nationally last year, said Reggie Reynolds, executive secretary of the Virginia Cattlemen's Association in Daleville.
In the past two years, producers have seen the price of cattle drop 30 percent because of a combination of too many cattle on the market and higher feed prices, Reynolds said. A 500-pound heifer, for example, that sold two years ago in the the high $70s or low $80s per hundred pounds sells for $45 to $48 per hundredweight today, he said.
The cattle business historically runs in cycles, with larger herd sizes bringing lower prices. Over time, this leads to smaller herds and higher prices.
Higher cattle prices in the early 1990s prompted farmers to build up their herds until 1994, when prices dropped about 15 percent. Then, last year, corn increased from $2.40 to $4.25 a bushel, and Midwestern feedlots that fatten cattle for slaughter passed that increase along to farmers by paying lower prices for their cattle, Reynolds said.
Turning the market cycle around takes time, like moving a ``big old train,'' Reynolds said. Farmers began liquidating their herds in the fall, a process that is expected to take about 18 months to complete, he said.
Lower corn prices this summer could help boost cattle prices, Reynolds said.
Complicating the impact of cattle numbers on prices is an increase in the size of animals, Reynolds said. A steer that averaged 1,030 pounds 10 years ago weighs 100 pounds more than that today. Heavier animals also mean more beef on the market, which drives prices down.
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