PZ EXCLUSIVE – RUSSIA BUYING UP U.S. CATTLE

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ray-gano-med

ray-gano-medI just got an email from a reader who is a cattle rancher out in Oregon.

Hello Ray,

My husband and I are ranchers in Oregon. We sell our calves every year and last year we noticed that the Russians were there buying cows, we thought this was interesting.

This year the Russians bought our heifers. They told us they have a mandate to purchase 12 million in the next 10 years. I have heard many people say that it isn’t a big deal for the Midwest to be selling off their cows cause they will just buy from us once the drought is over.

Problem is our cows are going to Russia! Just thought you might like to know. God Bless!

This is interesting and something that is troubling.

Why?

cattle auctionThings in the cattle industry have been hard. I know that here in Texas many cattle ranchers have been forced to sell much of their herds. The cattle have not been in the greatest shape and not being totally fattened up once they go to slaughter. Beef quality the past few years have been dropping but the prices have been raising.

Now with ranchers selling their heifers (females) they are shooting themselves in the foot because it is the heifers that produce the calves that the ranchers sell. No females means no calves being born. It also means that ranchers need to go a year or two to raise baby heifers so that they can start producing again. This is a slow process and also causes higher beef prices because of simple supply and demand.

Around here ranchers sell their females to other ranchers and the female stock does not decrease so much for the area, they females just switch hands.

Enter the Russian buyers who are buying up everything in sight plus buying the heifer stock as well.

By taking the heifers out of the US stock completely, it means it will be even more difficult for the beef industry to bounce back.  

The Texas Cattleman’s association estimated 2014 as when we would start seeing the cattle industry beginning to start to bounce back. Now hearing that Russia is buying much of the cattle stock, we will probably be looking at even a date that is further in the future.

Expect prices for beef to go even higher than expected if this continues. But that is not all, anything that is effected by the cattle industry will also be hurt.

Example, Want to get a good steak at your favorite restaurant? The price will be higher. I know that here in Texas we have already been seeing the prices at the restaurant begin to rise dramatically. What will eventually happen is that beef will be priced out of the common man’s price range. A steak that costs $18.00 today will cost $35 – $45 tomorrow. How many people will be able to afford those sort of prices? Not many. What will happen to restaurants that do not get many customers? They close the doors, people lose jobs, mortgages not being paid, less money in the local economy, etc.

Other industries that will be effected? Leather goods, animal feed, dairy, cosmetics, house hold supplies and the list goes on. These prices will also go up.

Is this a financial strategic attack by Russia? Possibly. Is it Russia’s way of feeding her own? Most definitely. Who will feel the pain in all of this? Those of us here in the US.

By Ray Gano

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