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Higher Cattle Prices Are Good But Wide Profit Margins Are Better, Elliott James Dennis

Center for Agricultural Profitability

Feeder and fed cattle prices have continued to rise throughout the first part of the year. Reduced cattle supplies and relatively stable beef demand have helped support higher prices. Fed and feeder cattle prices have reached all-time heights, at least nominally. In low inflationary environments comparing nominal prices across time would be less problematic. Contrary to previous sentiments, inflation has not been transitory. Inflation, as measured by the Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index), has increased significantly in the last 3 years (see Figure 1) and thus comparison across years should be done using real prices …