Each year CattleFax shares outlooks for what could come in the near and even distant future during the Cattle Industry Convention. For 2015, it looks like beef producers will see a slight drop off in the market, but profitability should remain high thanks to increasing global demand and lower input costs.
Here are some of the facts shared by CattleFax:
- Fed cattle prices increased $28/cwt in 2014 compared to 2013
- Cow-calf producers are seeing pretty good profits, but it looks to be more seasonal in 2015
- All of the protein markets had an incredible run in 2014, but think about where milk prices are at now
- Fed cattle markets move 20-22% each year from high to low
- The fed cattle basis in Kansas average $2.67/cwt last year
- The range for fed cattle is from $140 to $175/cwt
- The U.S. and Brazil contribute 50% of meat protein to the global markets
- Exports have increased $13 billion in five years and now are at $26 billion
- Beef export accounts for $352/head value. In 2020 it could be $500/head
For 2015 cattle prices are projected to average:
- Fed $157/cwt
- Feeders $220/cwt
- Calves $260/cwt
Closing thoughts from CattleFax CEO Randy Blach:
- "We have to manage risks. And managing risks is different than trading."
- "Historically cattle feeding tends to be a break-even business."
- "Margin operators (cattle feeders and stockers) will need to refocus on managing risk."
- "Grain prices will average near breakeven for producers the next few years."
- "Global buying power increasing. As incomes rise, so does the demand for meat."
- "Cow-calf producers will remain solidly profitable for the next several years."