High Beef Prices Could Slow the Industry

Agriculturally speaking, the poultry industry is synonymous with Northwest Arkansas. But where’s the beef? Same place.

Benton and Washington counties are tops in beef cattle in a state that ranks 16th nationally in the $2 billion industry. The average beef cattle farm in Arkansas is small, but there are 29,000 of them.

The poultry industry does have a direct impact on the welfare of its bovine counterpart, too. When the poultry industry is going well, chicken and turkey farms are flourishing. And it is their litter that’s spread across cattle pastures to help the grass grow. The more grass, the more head of cattle a farmer can put in the pasture.

In addition, with feed (particularly corn and soybean meal) prices low, farmers can pay more for calves. Cattle prices are better than average because it is much cheaper for a farmer to get his 400-pound cattle to the “fat cattle” weight of 1,000-1,300 pounds.

According to records at the Cooperative Extension Service of the University of Arkansas, beef cattle prices were a bit low in 1996, averaging $42.58 per 100 pounds. That figure rose in 1997 to $53.95, dropping slightly in 1998 to $52.94.

However, as Michael Popp of the University of Arkansas agriculture economics department said, there is a “but” when talking about cattle farming in Northwest Arkansas. And that is the rise in real estate value.

“There’s a bunch of real estate crowding out the farmland around here,” Popp said. “Residential and commercial properties are taking up five-acre tracts all over.”

Those wanting to get into the cattle business today in Northwest Arkansas would have to go almost 30 minutes from Fayetteville to find acreage suitable for cattle farming for less than $1,500 per acre.

Kirk Elsass, senior vice president of Lindsey & Associates in Fayetteville, said most farmers with cattle near Fayetteville are forced to “double-farm” with chickens because of the cost of the land.

“The problem around [Fayetteville] is that everybody is getting a lot more per acre,” Elsass said. “So you have to go farther out, way out like near Winslow or over by the Oklahoma line. People that are running cattle on their land are also raising chickens to supplement their income.”

Washington and Benton counties both have about 113,000 head of cattle and calves, far more than Carroll County’s 77,000, which ranks third in the state. But Washington and Benton counties have dropped off over the last quarter-century. Washington County is 6,500 head below its 1974 total. Benton County has 3,000 less head of cattle than it had in 1974. Of the five other top cattle counties in Arkansas in 1999, Carroll, Madison and Boone all increased their cattle population over the last quarter-century.

Washington County is the state’s fourth-largest land area, with 608,156 acres, and it has the largest number of farms, with 2,476 (Benton County is second with 2,323), most of which are poultry. And while there are some large-scale cattle farms in the area, the majority of the cattle in Northwest Arkansas are on “hobby farms,” ones with only about 20 head. In fact, 67 percent of Arkansas beef cattle farms have fewer than 50 head.

“If you have some pastureland available, raising cattle, from a quality-of-life perspective, is a good way to farm,” Popp said. “When there’s a cash-flow crisis, you can go out and sell a couple of calves. It’s a vehicle to generate cash flow when you need it. And there’s a lot of flexibility with the cattle. You can hang onto them and feed them up to a weight of 700 or 800 pounds.

“Cattle farming can be a nice hobby. You de-worm them once or twice a year, maintain the fence, round them up and take them to market. With sheep and goats, the production cycles are much shorter. You have to sheer them and worry much more about them getting out of the fence.”

About 97 percent of the beef cattle farms are family owned and operated.

A drawback for Northwest Arkansas is the lack of a slaughterhouse nearby. Calves are generally kept near feed lots, which are near the slaughterhouses. And while there are facilities in Fort Smith and Branson, Mo., slaughterhouses are more common in Oklahoma, Texas, Kansas, Nebraska and Colorado.

“That’s why you don’t see more cattle numbers in the state, because a lot of the feeding activity is happening out of state,” Popp said.