Kevin Good, with CattleFax says the USDA Semi-Annual Cattle Inventory Report showed the herd is still shrinking and producers are not in the rebuilding phase. He says about a third of the cow herd was in dry or drought conditions in 2023 and the cow slaughter shows there is still some liquidation taking place.
He says, “Last year the culling rate was less than 2022 but it’s still over 12%. So that needs to get closer to 9% before we can say that we’re starting to expand on the cow side. And then on the heifer side we still have a pile of heifers on feed. In fact, 40% of the on feed population is heifers, that number needs to be closer to 34%, 35% before we can truly say we’re expanding on the heifer side too.”
So what does that mean for their price projections for 2024? Good says they are expecting record prices again this year for fed cattle. “Fed prices you know we look at them this past year in 2023 we averaged $175. We’re suggesting we’ll average $184-$185 this year. So about a dime higher. And really, it’s a function of tighter supplies, still strong demand although we’re just a little bit nervous about demand because of our price point compared to pork and poultry. and then continued stronger leverage because we’ve got tighter supplies.”
Good says they are also predicting a record feeder cattle market in the coming year. “We would suggest $240 to $250 on an eight weight is where we’ll end up this year. So, substantially higher than last year. And so obviously as all prices move higher the margin the system particularly for a feeder and then a stocker operator probably going to be a little tighter this year than last year because the calf market is going to go up the most.”
