Cattle Industry Sees Encouraging Signs

Agriculture economists see signs of optimism in the cattle industry.

Beef cattle producers are not seeing the record high prices from a year ago, but strong export numbers offer hope that this year will be profitable.

“Per capita consumption is predicted to be higher in 2016, beef production is expected to be up, and, most importantly, exports are projected to be significantly better than in 2015,” said
Brian Williams, agricultural economist with the Mississippi State University Extension Service.

Williams said record prices were driven by tight cattle numbers.

“When the July cattle inventory report came out, indicating that replacement heifer numbers were up 7% from the previous year, prices began to fall and continued down until mid-December,” he said.

Beef production for 2015 was the lowest since 1993, but the herd is rapidly expanding. Williams said growth in the national beef herd and beef production will continue to pull cattle prices lower, as will competing proteins such as pork and poultry.

He expects prices to improve for steers early in the year before leveling out in the $130- to $140-per-hundredweight range.

The USDA’s cattle inventory report from January suggests total cattle numbers are up 3% from a year ago. Williams said that the number of heifers expected to calve this year is up 6%, which suggests “producers have been aggressively trying to grow their herds.”

Source: Delta Farm Press Daily S