Complexity In Beef Markets Make For Hard Decisions

Rising corn feed costs are forcing hard decisions for Michigan beef producers.

Scott Oswalt, one of two brothers who run the [family's livestock business] outfit with their parents, said the current market makes it difficult to form long-range plans, such as building a barn or purchasing property to raise more cattle. "We'll survive through it," Scott Oswalt said. "I wouldn't call it a disaster by any means, but it's a little bit of the unknown."

Oswalt said rising corn prices play the biggest role in the farm’s finances. Since it costs more for feed lots to bulk up cattle, producers don’t fetch as high an amount.

Additional complexity to beef prices are the low number of meatpackers within the US. Few meatpackers means less competition and price fluidity.

Complaints have drawn the interest of federal regulators, who are investigating possible antitrust violations in the meatpacking industry. [Kathleen Hawkins, executive vice president of the roughly 500-member Michigan Cattlemen's Association] said she's seen no evidence of any collusion or impropriety occurring locally.