Cow-calf beef ranchers should have at least a couple more years of profitable calf prices, according to Darrell Peel, an Oklahoma State University beef cattle market specialist. He gave a cattle outlook presentation recently to several hundred producers at the Cornbelt Cow-Calf Conference in Pella, Iowa.

There have been 11 cattle cycles since 1890, Peel said. The one we are in right now hit a low in inventory in 2004, and now herds are starting to rebuild with 1% more cattle and calves in the U.S. As of January 1, 2006. "We're starting to save heifers," Peel said. "We saved 3.5% more last year than the year before, and we project we'll save 3.8% more this year.

"It takes 4-5 years of that for our cattle numbers to hit a peak. I think it will be a slow, gradual expansion, and slowly falling prices, especially for calf prices. I expect 2006 to be another good year for cow-calf producers; 2007 is more 'iffy' but there are still good odds of calves staying profitable." When pressed by producers, Peel said prices for 500-600 pound steer calves could still be at $1.15 a pound or higher in 2007. And, when numbers peak and prices bottom a few years after that, he thinks we could be in a new trading range with calf prices holding on at 75-80¢ a pound. In the last cycle, calves bottom at about 55¢.

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Other cattle news bites that Peel delivered at the meeting included:

• The current price for 500-600 pound steer calves should peak in the month or so (they're over $1.30 a pound now). Then they will slowly fall to the end of the year. That's the normal seasonal pattern for calves -- peak in May, bottom on November.

• 700- to 800-pound feeder steers, ready to go into feedlots, have weakened in recent months to about $1.10 a pound, but are still a little above last year. They normally bottom in the spring and peak in the fall.

• Slaughter steers (1,100 pounds +) usually bottom on August, and peak towards the end of the year. "We may have seen the high for 2006 already," Peel said, at above 90¢ a pound. Larger feedlot placements recently will bring more beef to market as this year progresses, but exactly when it will hit is debatable.

• Slaughter cow prices usually peak in the summer and bottom in the fall. This is the most predictable seasonal trend of all the cattle markets, as most cow-calf producers market cull cows after weaning in the fall.

• There is a general weakness now in all of the beef products markets, from hamburger meat to higher quality products. Part of this is due to a surplus of the competing meats. This is leading to a major battle right now between packers and feedlots. Packers want to lower their bids for fed cattle because of the lower product prices, but feedlots are reluctant to accept those bids as they struggle to retain a profit margin. Even with cheap feed, the feedlots need about 90¢ on fed cattle "to make them work, and we're barely holding on to that," Peel said. "Both sides are playing hardball as they try to maintain margins."

• There are 7% more cattle in feedlots now compared to a year ago, a USDA report said last week. Feedlot placements in January were 16% over the year before. About half of that is represented by "light" cattle, according to Peel, that should be out on winter wheat pasture. But due to the drought in the Plains, there isn't any wheat and those cattle have gone into feedlots. "The big question is, when will those cattle come out of the feedlot to slaughter," Peel said. We could be stacking up a wall of cattle for summer slaughter, but that depends on how fast they finish them out, and move them to slaughter. If it's done orderly, there won't necessarily be a wall, and it won't necessarily cause a market crash.

• Cattle slaughter weights are increasing, partially attributable to mild weather (and excellent feedlot performance) this winter, and to cheap feed ingredients. The average carcass weight is about 20 pounds heavier than a year ago, said Peel.

• Half of the beef consumed in the U.S. is consumer as hamburger. We still have a problem producing enough hamburger domestically to meet that demand. An average fed steer carcass yields about 100 pounds of 55% lean hamburger, said Peel. Of course, consumers don't like hamburger that is that fat, preferring at least an 80% lean product. So to make hamburger that lean, processors have to add extra lean ground beef to bring the percentage up. That extra lean comes primarily from cull cow carcasses. "It takes about one cow carcass to go with every fed steer carcass to bring the hamburger up to the desired percent lean level," said Peel. And the problem is, there aren't enough of those cow carcasses to go around, especially at this stage of the cattle cycle when we are retaining cows. And that's why we have to continue to import lean beef from places like Australia, New Zealand, and Canada, just to get enough lean beef to satisfy our hamburger hunger.