For cattle farmers, it's been a year to remember
It's going to be a great farm year, if the prognosticators at the National Cattle Convention are right. Outlook specialists at the CattleFax seminar in Nashville painted a rosy picture for beef producers on several fronts. Highlights include:
Weather: Creighton University meteorology professor Art Douglas told the cattle producers that a strong El Nino is forming on the Pacific Equator. This warming of the water almost always signals good growing conditions in the Midwest. "Ideal" is how Douglas described it, with a warm spring and a cool, wet summer. Mike Murphy of CattleFax then said that if that forecast holds, we could see an above-trend corn yield over 160 bushels an acre and at least 13.7 billion bushels of corn harvested next fall. He predicted that 2 million acres will shift from corn to soybeans this year because markets actually favor beans. But the good weather will still lead to a bumper crop.
Corn prices: If the big corn crop materializes, prices for corn in the coming marketing year will average between $3.60 and $4.10 a bushel, Murphy said. "That means there is $0.50 to $0.80 downside risk from current $4.50 corn," he said. "The corn market will be helping cattle feeders in the coming year." Hay is cheaper, too, and will benefit cow-calf operators.
Cattle prices: They've been in record territory in recent weeks, with fed cattle up near $1.50 a pound live, and calves over $2 a pound. In the coming year, Kevin Good of CattleFax expects fed cattle to range from $1.25 a pound to $1.45, with the average right in the middle. "Feeders (750 pounds) will average $1.68, and calves will average $1.93," he predicted. Cull cows will be significantly higher, too, as more of them are retained for rebuilding herds. They'll average $0.90 a pound for slaughter. And the demand for bred cows is very strong now, said Good. They will average $1,700 to $1,750 per head in the coming year, up from $1,400 last year.
Profits: CattleFax CEO Randy Blach said profits to cow-calf producers will be near astronomical for the next two years at $350 to $400 per head. "We're going to expand the cow herd, and it will get underway earnestly this year," Blach said. "We must expand or we are going to become a niche market." Cow inventory on January 1 was reported at the lowest level since 1941. Annual per capita beef consumption has fallen from its peak in the 1970s of over 90 pounds per person, to just over 50 pounds now.