CattleFax looks into future of beef market
The Colorado State University (CSU) Department of Animal Sciences hosted the 28th Range Beef Cow Symposium Dec. 13-14 at The Ranch in Loveland, Colo.
The symposium is sponsored by the Cooperative Extension Service and animal science departments at CSU, South Dakota State University, University of Nebraska and University of Wyoming and offers practical production management information specific to the region’s cattle producers.
This year’s event included various industry speakers who delivered valuable information on beef cattle management strategies, ranging from consumer drivers of sustainability to feeder calf marketing.
Additionally, break-out sessions included up-to-date information and data from nationally and internationally known speakers, including several producer panels focusing on issues and opportunities in the beef cattle industry.
The symposium also hosted a top-notch trade show, showcasing a variety of commercial displays from more than 50 allied industry vendors.
During the symposium, CattleFax Chief Executive Officer (CEO) Randy Blach presented on the future of the cattle market.
Blach was raised on his family’s farm in Yuma, Colo. and graduated from CSU with a degree in animal science.
Blach began his career at CattleFax in 1981 and served as director of market analysis for 15 years before being promoted to CEO in 2001. He later received the Honor Alumni Award from CSU’s College of Agricultural Sciences in 2004, the Livestock Leader Award in 2011, and in 2016 he was awarded the Industry Leadership Award through the Cattle Feeders Hall of Fame.
A look into the future
“If you liked 2023 cattle prices, 2024’s should please you even more, as 2023 proved to be the second most profitable year in history for the U.S. cattle industry,” Blach stated.
Depending on the quality of cattle being sold and available risk management coverage, there is even stronger profit potential for calves, feeders and fed cattle marketed next year.
“However, a delay in cow herd expansion caused a recent recalibration in market prices,” Blach added. “The markets had too much expansion built-in going into late summer and fall, and the cause was not ongoing drought conditions in many areas.”
However, Blach stated, “We can anticipate a four- to five-percent decline in beef production in coming months, which will reach its lowest point in January of 2024.”
“We have three million fewer beef cows today than we did back in 2019, but we’re still killing the same amount.If this path continues, we’re going to have more hooks than we have cattle,” he noted. “Heifers still make up 40 percent of cattle on feed, but when they start staying on the ranch, the supply of feeder cattle is going to tighten up.”
Blach believes the real challenge still lies ahead, since the industry will hit a production low in 2025-26, and the number of harvested animals will be down 1.5 to 1.6 million head in 2024.
“This change will make Saturday slaughters a relic of the past, while also squeezing some extra dollars out of processors and into the pockets of producers,” he expressed. “On a global scale, we are seeing a decrease in supply and an increase in wholesale prices, causing a roughly 13 percent decline in exports in 2023.”
Blach noted the top three importers of U.S. beef are Japan, South Korea and China, and during 2023, these three countries lost purchasing power due to the strength of the U.S. dollar.
“With tight cattle supplies and continued pressure from drought, profits to cow/calf operations are projected to hit $500 per head in 2024,” he expressed. “It’s been nearly seven years since there were sound profits in the cow/calf sector.”
Blach concluded some relief from drought conditions, combined with a low cattle inventory, would result in more money flowing across all sectors of the cattle industry, especially to cow/calf producers.
Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
