Cattle markets trend upward

The 2022 Cattle Industry Convention and National Cattlemen’s Beef Association (NCBA) Trade Show held in Houston Feb. 1-3 was host to a variety of executive meetings, educational sessions, policy review and awards banquets for those in the beef industry. 

CattleFax, the industry’s leading market and weather analyst, presented their annual U.S. and Global Protein and Grain Outlook Seminar Feb. 2 with positivity. 

According to CattleFax, the cattle cycle, packing expansion and strong demand suggests a stable, profitable year ahead for cattle producers in all segments. 

Cattle cycle

Coming into 2022, the U.S. beef cowherd is down more than 700,000 head from last year.  

“Drought, market volatility and processing capacity challenges affected 30 to 40 percent of the cowherd over the last year,” said CattleFax’s Vice President of Industry Relations and Analysis Kevin Good. “Without an improvement in weather and profitability, at least 250,000 more head will be liquidated in 2022.” 

According to a NCBA release, CattleFax noted feeder cattle and calf supplies will be nearly 675,000 head smaller than 2021, and fed cattle slaughter will decline 400,000 head to 25.7 million. Good explained commercial beef production will continue to contract over the next few years, with a two percent decline forecast to begin in 2022. 

Due to the contracting cycle, Good forecasted the average fed steer price in 2022 at $140 per hundredweight (cwt), up $18 per cwt from 2021. 

All classes of cattle are expected to trade higher: the 800-pound steer price is expected to average $172 per cwt, the 550-pound steer price is expected to average $205 per cwt, utility cows are forecast at an average of $75 per cwt and bred cows are expected to average $1,850 per head. 

Beef demand

CattleFax also highlighted historically high inflation – majorly affecting low-to-middle income American households – driving beef products into higher price ranges. Good noted wholesale demand will likely slow down in 2022, but cutout value should hold a steady $280 per cwt average. 

In addition to local beef demand, U.S. beef exports are expected to grow by five percent in 2022 as global protein demand increases. 

“The tightening of global protein supplies will support stronger U.S. red meat exports in 2022,” Good said. 

Grain outlook

CattleFax Vice President of Research and Risk Management Mike Murphy presented the 2022 grain outlook. 

“Exceptional demand from China is leading U.S. corn exports to new records and expanded interest could easily push exports higher in 2022,” according to Murphy. 

He noted CattleFax forecasts planted corn at 91.8 million acres with an expected yield of 180 bushels per acre in 2022. Soybean planted acres are expected to remain near 87.2 million acres. 

Weather will continue to influence hay prices across the Central Plains and the West as different regions experience some level of drought, noted Murphy. 

“Dec. 1 on-farm hay stocks were down six percent nationally from the previous year at 79 million tons,” Murphy presented. “Expect current year hay prices to average near $186 per ton, $10 higher than 2021 prices due to tighter supplies and stronger demand.” 

Meteorologist Matt Makens shared the La Niña cycle will likely continue this spring, though there is the possibility for change during the summer.

Averi Hales is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.