Growing up I have heard my dad mention many times how years ago you could take a 16 ft. trailer load of calves to the stock barn, sell them, and the check you received would be enough to buy a new pickup truck. This past November, Charles Hord, Executive Vice President of the Tennessee Cattlemen’s Association, wrote an article that reaffirmed what dad has always said was true.
With his permission, I wanted to share what I thought was a very interesting read. Amazingly, these numbers are already out of date only four months after his original article.
“In case you missed it, the cost of goods in the US is increasing drastically. I always like to look at these things through a historical lens. Below are some price comparisons going back to 1965.
In 1965, the average settle price of an 850 lbs. steer was 25.5 cents, so its sale barn value was about $216. A gallon of gas was 31 cents. A new home on average cost $20,000 and a new F-150 MSRP cost $2,200. If a farmer sold eleven 850 lbs. steers he could buy a new F-150 with money left over. If he sold 95 steers, he could buy a new house. And one steer could buy about 690 gallons of gas.
In 1975, an 850 lbs. steer averaged 43.5 cents or $369. Gas was .57 cents; a new home averaged $32,000 and an F-150 was $4,500. A farmer had to sell slightly over 12 steers to buy his basic model F-150 truck but only 87 to buy an average priced new home. A steer was worth 650 gallons of gas.
In 1985, an 850 lbs. steer averaged 65.8 cents or $560. Gas was $1.12 (one steer bought 500 gallons). A basic model F 150 was $7,965 (worth 14 steers) and a new house was $68,500 (worth 122 steers).
In 1995, an 850 lbs. steer was worth 66.5 cents or $565. Gas was $1.15 (one steer bought 491 gallons). A basic model F-150 cost $14,500 (worth over 25 steers). A new home cost $106,000 (worth 187 steers).
In 2005, an 850 lbs. Steer was worth 86.7 cents or $737. Gas was $2.30 (one steer bought 320 gallons). A basic model F-150 cost $28,000 (worth 38 steers). A new house was $191,000 (worth 259 steers).
In 2015, an 850 lbs. steer was worth $1.45 or $1,232. Gas was $2.43 (one steer bought 506 gallons). A basic model F-150 cost $28,400 (worth 23 steers) and a new house was $201,000 (worth 163 steers.) This was during that two-year period of historical price increases for cattle.
In 2021 (so far) an 850 lbs. steer has averaged $1.22 or $1037. Today gas is about $3 gallon (one steer can buy 345 gallons). A new basic model F-150 costs $29,000 (worth about 28 steers). A new house costs $408,000 (worth 393 steers). Housing prices are a separate topic, but I pray for young folks going out trying to buy a new home today.”
While these numbers may be depressing (and if we were to run the numbers of 2022, they would be even more depressing), they also show the resiliency of farmers. The men and women bringing food to your plate are doing so in a tough economic environment and are by in large not getting rich in the process, so the next time you see a farmer, be sure and say “thank you!”
