KNOXVILLE -- Faced with the lowest cattle prices since 1978, Tennessee
cattle producers are struggling and some may not survive, a University of
Tennessee economist said last week.

"No doubt we will see some Tennessee cattle producers go out of business
during this downturn," Emmit Rawls of UT's Agricultural Extension Service
said. "Those operating on borrowed money may not be able to withstand the
low prices."

But Rawls said Tennessee is more fortunate than some cattle-growing areas
because many of the state's cattle producers are part-time farmers who hold
a job in town or have other agricultural enterprises.

Cattle prices have been driven low mainly because of higher feed-grain
prices, Rawls said. Most Tennessee cattle farmers sell to buyers who feed
the cattle to market weight.

"When the grain they feed the cattle is expensive, they can't afford to pay
producers as much for cattle," Rawls said.

The U.S. cattle industry's biggest inventory since 1990 is another factor
contributing to low prices at the farm and bottomed out in April, he said.
The inventory probably will peak in January and begin declining.

"We need two or three things to happen to improve cattle prices (at the
farm), Rawls said. "We need a large corn crop to drive grain prices down;
we need to reduce the size of the cattle herd; and we need to stimulate

Rawls said it normally takes three to five years to work out of a price
slump. Prices have been declining since 1994.