News
Transportation costs eroding profitability for cattle producers
The owner of one of the largest sale barns in the country says diesel prices are impacting margins for cattle producers. Jackie Moore with Joplin Regional Stockyards in Missouri says the cost to ship cattle have skyrocketed. “Here’s the thing, just like today, we’re paying $5.75 for trucks today, $5.75 a mile,” he says. “Thirty or forty-five days ago when this fuel went back down into the $4 range, we were paying $4.75 a mile.”
He tells Brownfield the recent shuttering of beef processing facilities in the eastern part of the country has made matters worse. “We ship those cattle from the east to the Midwest somewhere to slaughter them and it’s 1,000 miles,” he says. “Now we have $5,000 a load added to those cattle right off the bat, which is another $10 a 100 weight we take off of them because we’re hauling 50,000 pounds. Right there’s $10/cwt extra that we’re going to end up paying for the freight just to get them somewhere where we can get them slaughtered.”
The national average for diesel is currently $5.61/gallon, up nearly $2 from last year.
According to AAA crude oil prices remain in the $80 per barrel range amid the ongoing instability in the Strait of Hormuz.
-
-
When all the cattle transporters are out of business because rates have not increased enough to cover the cost of doing business what will cattle producers do then? 5.75 is not enough to cover everything and make any profit at all on a one way operation.
Transportation costs while they seem high, are probably the smallest part of that half a million dollar load we are hauling. Nobody talks about how our costs have gone through the roof too. Insurance, tolls, parts, shop labor, oil, cost of equipment is out of sight. So yes while this article sounds like it’s such a huge impact, trust and believe we are still hauling for way under what we should be. Also I would like to add that the 50,000lbs mentioned is more like 52-55,000lbs which is also more wear and tear on our equipment.