Cattle Prices Aim Higher
Fall stocker prospects positive . by Wes Ishmael
Declining cattle numbers and strong beef demand set the stage for significantly higher cattle prices next year and beyond , according to CattleFax , during the CattleFax Industry Outlook at August ’ s 2021 Cattle Industry Convention and NCBA Trade Show in Nashville .
CattleFax projected the average steer calf ( 550 lbs .) for next year to be $ 200 / cwt ., which would be $ 30 more than this year . Feeder steer prices ( 850 lbs .) were forecast $ 20 higher than this year at an average of $ 165 / cwt . CattleFax analysts forecast next year ’ s average fed steer price at $ 135 / cwt ., up $ 14 from this year . That ’ s with the forecast average carcass composite price at $ 265 / cwt ., up $ 5 from this year .
The CattleFax crew forecast bred cows to average $ 1,750 / head next year , which would be $ 125 more than this year . They see utility cows averaging $ 70 / cwt ., up $ 6 .
Although less bullish , USDA ’ s Economic Research Service ( ERS ) continues to increase price projections .
In the August Livestock , Dairy and Poultry Outlook , ERS projected the average feeder steer price ( 750- 850 lbs ., basis Oklahoma City ) this year at $ 145.13 / cwt ., which was $ 3 more than the previous month . Average prices were projected at $ 153 in the second and third quarter . Compared to the previous month , that was $ 7 higher in the third quarter and $ 5 higher in the fourth quarter .
ERS forecast next year ’ s annual average feeder steer price $ 5 higher at $ 151.50 . Prices are projected to average $ 149 in the first quarter next year and $ 147.00 in the second .
ERS also increased the forecast fed steer price by $ 4 to $ 124 / cwt . in the third quarter and to $ 127 in the fourth quarter of this year . The
Ultimately , during the current contraction phase , CattleFax expects feeder cattle and calf supplies to decline roughly 1 million head from the cyclical peak . CattleFax expects the beef cowherd to decline 400,000 head by January 1 of next year , reaching 30.7 million head .
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projected 2021 annual price increased $ 2.00 to $ 121.20 , compared to the previous month . ERS raised the expected average fed steer price next year by $ 4 to $ 126 .
Part of that is based on lower expected beef production this year and next .
Total beef production this year was projected at 27.87 billion lbs ., which was 33 million lbs . less than the prior month . It would be 698 million lbs . more (+ 2.57 %) than last year . ERS analysts say the decline is mostly due to lighter expected carcass weights due to a higher expected proportion of non-fed cattle being slaughtered through the end of the year .
According to Kevin Good , CattleFax vice president of industry relations and analysis , total cattle inventory peaked at 94.8 million head . He explains those numbers remain in the system due to the COVID-19 induced slowdown in harvest over the past year . So , fed cattle slaughter will remain elevated through 2021 as carryover from pandemic disruptions works through the processing sector , which remains hindered by labor issues .
Ultimately , during the current contraction phase , CattleFax expects feeder cattle and calf supplies to decline roughly 1 million head from the cyclical peak . CattleFax expects the beef cowherd to decline 400,000 head by January 1 of next year , reaching 30.7 million head . Part of that has to do with lingering drought . continued on page 60