CattleFax Predicts Large Supply and Strong Demand in 2018

CattleFax celebrated its 50th anniversary during the popular CattleFax Outlook Session at the 2018 Cattle Industry Convention and NCBA Trade Show. CattleFax Senior Analyst Kevin Good highlighted the industry’s profitability during 2017 and said the trend looks to continue into 2018.

CattleFax analysts told the audience U.S beef cow inventory increased 2.8 million head in four years, and an additional 200,000-400,000 head are expected to be added to the herd over the next few years. Good said there are growing supplies of protein coming to market during the year ahead, including large supplies of competing proteins, which will weigh on all beef prices.

“We have a bigger supply of all proteins ahead in 2018. For the past year we were very fortunate to have solid export volume,” said Good. “We are forecasting trade to increase year-over-year in 2018, but still, the rate of production is out-pacing the rate of exports.”

Although beef production is expected to increase to 27.5 billion pounds during 2018, Good said current consumer demand is expected to remain good and potentially increase as retail prices moderate. He said CattleFax is predicting beef to remain a strong competitor against other proteins.

“Demand is robust on all fronts. Domestically, retail demand is increasing and beef is being featured more in the consumer markets,” said Good. “The retail and foodservice industries are doing very well and the solid economy in the United States is one of the main drivers as unemployment rates continue to decline and per capita income rises.”

Good said even though beef demand is high, leverage will continue to be a challenge for the feedlot and packing segments as shackle space becomes increasingly constrained by rising slaughter rates. With the growth in production, Good said he anticipates lower, but still profitable price levels for the cow-calf segment, while feeders and backgrounders will see their margins narrow.

Input costs are expected to remain manageable, with grain prices expected to remain steady. According to CattleFax, yields will drive corn prices in 2018-19 marketing year with no significant changes anticipated in acreage or demand. Futures corn prices are projected to range from $3.25 to $3.95 per bushel as supplies remain adequate. With more livestock to feed in 2018 and the smallest acreage on record in 2017, CattleFax predicts hay prices will increase $10-$15 per ton with additional weather-related price risks.

Drought conditions have been spreading across the United States since last winter with the Southwest being impacted the most. Art Douglas, professor emeritus, Creighton University, predicts a possible transition from La Niña conditions to a weaker El Niño by summer. U.S. weather patterns over the next three months will be dictated by La Niña. However, equatorial warming could shift drought patterns across North America by late spring and summer.

During the session, CattleFax analysts predicted fed cattle prices lower than prior year levels, averaging $115 per hundredweight (cwt.). Good said fed cattle prices are likely to face resistance near the $130 level, with downside risk in the upper $90 range. He predicted bargaining position will continue to favor cattle processors and retailers, with profit margins at or above 2017 levels.

CattleFax projected 750-pound steers will average $1 lower than 2017 levels at $145/cwt., with a range from the upper $120s to $160/cwt. Meanwhile, U.S. average 550-pound steer calves will see a trading range from $170/cwt. at the spring high to an average price in the upper $130s, during the fall marketing season. For the full year, calf prices are expected to average $158/cwt.

To see more from the CattleFax Outlook Session or to become a member, visit www.cattlefax.com.

Webinar Outlines 2016 Calf Market Expectations

Cattle Fax Market Outlook 2014CENTENNIAL, CO — Cow-calf margins will shrink as the U.S. beef cowherd expands, but producers can ensure future profitability by adjusting business plans for the supply increase. An upcoming free CattleFax webinar will address a 2016 outlook for the cow-calf segment and entire beef sector, while exploring continued cowherd expansion.

The CattleFax Trends+ Cow-Calf Webinar will be at 5:30 p.m. MT, Jan. 20, 2016. To participate in the webinar and access program details, producers and industry leaders simply need to register online at www.cattlefax.com/meetings.aspx

One of the most aggressive U.S. beef cowherd expansions in the last four decades will increase beef supplies and pressure cow-calf profitability over the next several years. As profits narrow during that time, well-informed producers can maintain healthy margins by adjusting production, marketing and risk management plans with increasing supplies in mind.

  • CattleFax analysts will discuss a variety of topics in the one-hour session, including:
  • Cattle and feedstuff market projections for the next 12 to 18 months
  • Supply and margin expectations based on U.S. beef cowherd expansion estimates
  • Expected returns of beef cows over their productive life and potential opportunities.

The Trends+ webinar series informs cattle producers about current market conditions and provides providing decision-friendly advice regarding management decisions. The analysis and strategies shared through the webinar series has reached more than 2,500 producers, and sponsorship from Elanco Animal Health is making the seminar free for all attendees.

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CattleFax is a member-owned organization that serves producers in all segments of the cattle and beef business. CattleFax is the global leader in beef industry research, analysis and information. Since 1968, the organization’s exclusive industry database has set the standard for market information and analysis. Visit www.CattleFax.com to learn more and become a member.

Webinar for Producers with Value-Added Calves

calving season #calfwatch14Seasoned cow-calf producers recognize the calf market’s record-high prices are likely to decline as cowherd expansion brings additional supplies. Producers can maintain higher profitability by recognizing this shift and quickly adjusting management and marketing strategies.

CattleFax will discuss these topics during its next Trends+ Cow-Calf Webinar at 5:30 p.m. MT, Jun. 10, 2015. To participate in the webinar and access program details, producers and industry leaders simply need to register online.

The one-hour session will include a variety of relevant topics for the cow-calf audience:

  • A second half 2015 price outlook for the cattle and feedstuff markets,
  • Expectations for 2015 value-added premiums in the calf market, and
  • Considerations for estimating returns on value-added management practices.

The Trends+ webinar is designed to inform cattle producers about current market realities and provide producers with decision-friendly information to assist in making intelligent marketing decisions. More than 2,000 producers have benefitted from the analysis and strategies shared through the webinar series since fall 2013.

Elanco Animal Health is sponsoring the webinar – making it free for all cattle and beef producers to participate.

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CattleFax is a member-owned organization that serves producers in all segments of the cattle and beef business. CattleFax is the global leader in beef industry research, analysis and information. Since 1968, the organization’s exclusive industry database has set the standard for market information and analysis. Visit www.CattleFax.com to learn more and become a member.

CattleFax Predicts Strong Prices to Remain in 2015

SAN ANTONIO, TEXAS – The popular CattleFax Outlook Session today at the 2015 Cattle Industry Convention and NCBA Trade Show gave cattlemen and women reasons to be optimistic. Analysts told the capacity crowd to expect fed cattle prices averaging in the mid-$150s, slightly higher than last year. Prices will trade in a range from near $140 at the lows to near $170 at the highs in the year ahead. While early year highs for 550 pound steers will range from near $285 to lows near $235. Analysts cited the improved forage situation, lower grain prices and record margins in 2014 for feeders and stockers as the primary reason cow-calf producers will remain in the driver’s seat for the year ahead.

Despite exceptional prices in 2014, CattleFax CEO Randy Blach said he expects the market peak is behind the cattle industry now.

“We put the top in the market in the past year and the signal for expansion has been transmitted,” he said. “We will begin to see some modesty expansion in herd numbers now and that will cause prices to trend lower in the years ahead than what we saw in 2014.”

He explained that growing supplies of cattle and beef over the next several years will rebalance the normal price and margin environment among industry segments.

“Prices will then retreat back to the lower end of the new trading range,” said Blach.

Despite the adjustment, he explained that cow-calf producers will continue to see relatively strong returns over the next four to five years, aided by corn prices expected to average $3.60 per bushel in 2015 and an improved forage production picture.

Art Douglas, Ph.D., Professor Emeritus at Creighton University, presented the annual weather forecast which projects moisture conditions in the United States through the summer.

“El Nino conditions have again built across the Pacific and this will fuel a split jet stream pattern into the Southwestern United States. Moisture will gradually increase in February from southern California to the southern High Plains,” said Douglas. “Snow-packs in the northern Rockies are expected to remain well below normal at 50-70 percent levels while the southern Rockies should gradually build their snowpack through March. As the jet heads east it will pick up Gulf moisture and lead to above normal rainfall throughout the southeast.”

“The pesky ridge in the West will gradually weaken during February and by the spring this will allow moisture to increase in the Pacific Northwest,” he explained. A strong Great Lakes trough is forecast to keep a broad portion of the United States colder than normal through the spring and early summer.”

Douglas said this pattern should lead to delayed planting in the Corn Belt with possible threat of late frosts into the late spring.

“The cool temperatures are likely to persist into early summer and this will slow crop progress but be ideal for corn pollination in July. The silver lining in the forecast is that the Midwest should turn warmer by August and September and this will help speed up crop maturation,” he said.

For more information about the Cattle Industry Convention and NCBA Trade Show visit www.beefusa.org and follow #CIC15 and #BeefMeet on Facebook and Twitter.

Cattle Fax Market Outlook 2014

Cow-Calf Webinar Provides 2014 Outlook

Cattle Fax Market Outlook 2014CENTENNIAL,CO — Dec. 18, 2013 — Due to the overwhelmingly positive response from cattle producers and beef industry leaders to the first Trends+ Cow-Calf Webinar in September, CattleFax analysts will be hosting its next webinar at 5:30 p.m. MT, Wednesday, January 22, 2014.

Cattle producers have limited time and opportunity to analyze all of the fundamental data and trends that shape the cattle, beef and grain markets. Modeled after the popular CattleFax monthly cow-calf producer newsletter Trends, the upcoming webinar will provide producers and industry leaders with an outlook on the 2014 markets.

The CattleFax team will share its analysis and perspective on how these factors will influence cattle producers in the upcoming year:

  • U.S. livestock and feedstuff production scenarios and expectations
  • Profit opportunities and risk management strategies
  • Forecasts for the 2014 prices in the calf, feeder cattle, fed cattle and beef markets

Attendees will gain a better understanding of developing macroeconomic issues that will change the way the cattle and beef companies operate – including beef cowherd expansion, cheaper feedstuffs, energy market price changes, and feedyard and packing segment overcapacity.

The Trends+ webinar is designed to inform cattle producers about current market realities and provide producers with the information to assist in making intelligent marketing decisions. To participate in the seminar and access program details, producers and industry leaders simply need to register online at www.cattlefax.com/meetings.aspx.

CattleFax is a member-owned organization that serves producers in all segments of the cattle and beef business. CattleFax is the global leader in beef industry research, analysis and information. Since 1968, the organization’s exclusive industry database has set the standard for market information and analysis. Visit www.cattlefax.com to learn more and become a member.

For more information, contact: Lance Zimmerman, Analyst, lance@cattlefax.com, 800-825-7525