Why livestock is more profitable than crops right now in Nebraska

WAVERLY, Neb. (KLKN) — Nebraska livestock producers, especially cattle ranchers, are enjoying significantly greater profits this year than farmers raising crops.

That’s according to a new report from the Nebraska Farmers Bureau.

“Crop prices and livestock prices are pretty related,” said Abygail Streff, an economist with the farm bureau. “When you see a decline in crop prices, you often see an increase in livestock prices.”

SEE ALSO: As heat bears down on crops, Nebraska farmers say drought could change what’s grown here

Streff attributes that to cheaper grain to feed cattle.

“Evidently, this means feedlots are more likely to take on more cattle,” she said. “So that drives that market up.”

Due to a cow’s value being based on its weight, heavier cattle is great news.

SEE ALSO: 12 Nebraska counties declared natural disaster areas due to drought

Another reason for high cattle prices is low supply.

“All the droughts that have been going on, our cow herd is smaller” said Mark McHargue, a fourth-generation farmer and president of the farm bureau.

SEE ALSO: Ballooning beef prices pinch Nebraska butchers and consumers

McHargue said ranchers right now face a tough decision between short-term and long-term gain.

They could sell their cattle now to make more money or save them to grow the herd.

“That’s the only way we will get more cattle in the country,” he said.

SEE ALSO: Nebraska farmers call on Congress to extend 2017 tax cuts

There are resources to help farmers make that choice, including research programs through universities.

“Even people supplying you feed, or mineral, a lot of times they are doing good research that kind of helps you make some of those decision,” McHargue said.

He also felt positive that the agricultural diversity in Nebraska will help it continue as the world’s third largest agriculture industry, at nearly $1 billion.