Falling cattle prices are affecting producers in the Aberdeen, S.D. area.
Ross Ulmer, who runs a cattle operation near Frederick, told the American News (http://bit.ly/1tf2uxF ) that packers are seeing financial gain while producers get the short end of the stick. Kevin Larson, owner and auctioneer at Aberdeen Livestock, said that packers and retailers "are making extraordinary margins right now."
"The margins are higher than they've ever been in history," Larson said. "If you look at steak in the store, it buys for $12.99 per pound. For what the producers are selling to the packers, it should be at about $7.99."
Hub City Livestock owner Steve Hellwig attributes the low cattle prices to the cyclical nature of the market. He said that in the current market, feedlot operations are getting hit hardest.
"We had a terrible year. We have lost a lot of equity at the feedlot level," he said.
Producers fed more feed to calves they purchased last fall so they would be heavier, Hellwig said. He said more money could have been made by farmers and ranchers if they had saved the grain to feed their herd longer or sold the grain.
Ulmer is optimistic that cattle prices will turn around, particularly if there's a strong corn crop.
"A lot of it is dependent on the corn crop," he said.