What is in this article?:
- Expect cattle prices to remain strong going into 2014
- Beef cow replacements up
- Average growing conditions
- Should support herd expansion
- Cattle market prices are expected to remain fundamentally strong for 2014.
- Livestock farmers should consider making feed purchases during 2013 harvest.
- Beef demand expected to be further tested as weak U.S. economy continues.
CATTLE MARKET PRICES for 2014 should remain fundamentally strong and average 5 to 8 percent higher than this year, according Auburn University Extension Economist Walt Prevatt.
Should support herd expansion
“ If cattle market prices improve, this weather should support herd expansion efforts.”
Total 2013 U.S. hay production is expected to be larger than a year ago, he says. “However, higher inputs costs will contribute to continued high hay prices. Therefore, alternative winter forages and feedstuffs will be in much demand this winter as cattlemen seek to feed their cow herds and stocker cattle.”
U.S. beef demand has felt some challenges since the recession of 2008 due to high unemployment, rising prices, and tightening consumer grocery budgets, says Prevatt.
“Domestic beef demand is expected to be further tested during 2014, as consumers continue to experience rising prices for most goods and services.
“If consumer disposable income does not rise proportionally, shopping habits and choices will shift as prices rise forcing consumers to substitute and/or reduce the bundle of goods and services they consume.
“The U.S. economy during 2014 is expected to grow GDP between 2 to 3 percent. GDP growth above and below this level with enhance or adversely impact domestic beef demand.”
Per capita consumption of beef is expected to decline during 2013 and 2014, he says.
“The combination of lower domestic beef production, a modest increase in imports, and slightly lower exports is expected to decrease domestic net beef supply marginally in 2013.”
Prevatt says that as the U.S. population increases in the future, per capita beef consumption likely will be lower unless one of more of the following situations occur: U.S. beef production increases, U.S. beef imports increase, and/or U.S. beef exports decrease.
Any unexpected changes in the growth of the U.S. economy, unemployment, and rising costs of other goods and services could test beef demand and recent increases in retail beef prices, he says.
It is very important, says Prevatt, that the U.S. continues to sustain and grow beef export markets.
“These export markets could be worth $5 to $10 per hundredweight on the value of fed slaughter cattle. Growth in beef export markets will also help to moderate the price impacts of any weaknesses in U.S. broiler and pork exports.”