Ag economist provides beef market overview
Livestock Marketing Information Center (LMIC) Ag Economist Tyler Cozzens provided updates on and predictions for the beef market during the Progressive Rancher Forum held Dec. 4 at the Wyoming Stock Growers Association Winter Roundup Convention and Trade Show in Casper.
“The title of this program is ‘Beef Market Prices – How Many Good Years Are Ahead?’ And, to get right to the point, I believe it will be two, possibly three years,” Cozzens began.
Forage and crops
Cozzens noted it is important to first have a discussion on forages and crops before diving into the beef market.
He pulled up a current U.S. Drought Monitor map and pointed out most of the West has come out of a fairly devastating drought, and the majority of Wyoming is no longer facing drought conditions. Drought conditions have instead shifted to the South, with impacts felt in the Southwest, Southeast and parts of Texas.
Additionally, he noted hay stocks are down in Texas, Oklahoma, Nebraska and Colorado, while other Western states have plenty of available forage.
“For hay prices in Wyoming, monthly alfalfa prices have come down in the last few months compared to a year ago, but they are still higher than the typical level,” he said.
“Hay prices might be up, but we have reprieve on the corn side of things,” Cozzens continued.
He noted corn prices have seen a general downward trend, with lower prices reported during every week of the year.
“For 2024, the corn market is looking at a price of around five dollars or a little below,” he said.
Cozzens further pointed out the demand for soybeans, especially soybean meal, has been strong, resulting in lower supply, higher production and therefore, higher prices.
“Soybean prices are expected to trend lower, with the futures showing moderate levels throughout the year,” he concluded.
Cattle and beef
Cozzens then shifted his discussion to cattle and beef markets, explaining when it comes to supply, cattle on feed numbers as of Nov. 1 above year-ago levels.
“We have a stream of cattle coming through the pipeline, but when we get into the second half of 2024, those supplies are going to slow way down,” he stated.
Cozzens also pointed attendees’ attention to the percentage of heifers included in cattle on feed numbers.
“I bring this up because we are looking at 42 percent, which we have never seen before,” he said. “A lot of females in the pipeline means producers aren’t rebuilding their herds, meaning the national herd is going to continue to shrink until producers start retaining more of their heifers.”
“As I mentioned before, when supplies shrink, prices go up, assuming demand stays the same,” he added. “So, this is one number we are watching very closely. We want to see fewer heifers in the pipeline and producers getting more comfortable with rebuilding their herds.”
When it comes to cattle and beef prices, Cozzens noted there is plenty of economic opportunity and incentive for producers to market their product.
“Feeder prices will pressure a little lower because of the market volatility we typically see around the holidays, but I would argue we will see those prices get a little higher into 2024,” he said.
Box beef prices at a wholesale level are holding around three dollars per pound, which is well above year-ago and typical levels, according to Cozzens.
“Although beef production is down by about five percent and retail prices are record high, consumers are still purchasing it. There is a strong demand for beef,” he stated. “This is a positive for the beef industry and proof producers are all doing a very good job at providing a high-quality eating experience.”
Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
