If you’ve been lucky enough to hang on to your cow herd during the twin droughts and pandemics of the past three years, you may finally be rewarded this year. CattleFax market experts told beef producers at the 2023 Cattle Industry Convention in New Orleans that this could be a record price year for all classes of cattle.
The forecast comes after two years of herd culling, primarily due to widespread drought in the Great Plains and West. Cattle Fax economist Kevin Good said 50% of the country’s cows were in the drought zone last year, leading to a 13.5% culling across the industry. This is the highest ever.
Both cow slaughter and finished cattle numbers will decrease in 2023, and buyers will have to pay to get what they want. Here is a forecast of average prices.
Feed cattle: $150 to $172 per setweight trading range, with an average of $158 per year. That’s $14 more than last year. The highest prices should come at the beginning of the summer, then again at the end of the year.
550 lb calves: Price range $200 to $250 per year, with an average of $225. That’s an increase of $29 over last year. Those 550 pound weaned steers will cost $1,375 per head!
Eliminated cows: After last year’s sell-out, there won’t be as many catches this year, and the demand for grinding burgers is high. Prices will jump to $100 per hundred, $20 more than last year. In fact, demand for this grade of beef may spur further imports from Australia.
Breeding cows: As the nation’s cow herd rebuilds over the next few years, so will the demand for bred cows and heifers and even cow-calf pairs. Quality bred cows can range from $1,900 to $2,300.
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The general economy is improving. Inflation is easing to perhaps 3% to 4% by the end of 2023, Mike Murphy said. Higher interest rates may persist and have already added $20 to $40 per head to the cost of owning beef cattle.
Corn acreage will be similar to last year. The average yield will be higher when more favorable weather is forecast. Murphy expects about 85 million acres of corn to be planted, and the same goes for soybeans. Corn prices will range from $5 to $5.50 per bushel.
Hay prices will fall. That should start in the fall of 2023. The weather is in the early stages of an El Nino transition, which should help overcome the drought and expand hay production while finally greening up pastures.
More beef on milk. More and more dairy cows are being bred to beef bulls to take advantage of market premiums for higher quality beef, especially compared to straight milk. Now about 7% of cattle slaughter is meat for milk. Good expects that to be 15% by 2026.
Beef exports are still strong. They add $500 to the cattle markets for a fed bull.
The demand for beef is incredibly strong. Good says last year we had the highest per capita beef consumption in the U.S. in 12 years at 58 pounds. Yet in the face of this supply, we also had record retail beef prices at $7.35 per pound. Higher prices with higher supplies can only mean one thing: demand for quality beef is skyrocketing.