NASHVILLE, Tenn., Feb. 6, 2014 -- Improved moisture conditions in much of the U.S. in the coming year will ensure continued supplies of cheap cattle feed, CattleFax analysts told an audience at the industry’s biggest convention Wednesday in Nashville.
With more normal precipitation for the 2014 growing season, including in drought-affected areas of the West Coast, CattleFax predicts an adequate corn crop to build the carry-over supply. The improved supplies should assure lower feed costs over the next 12-24 months, according to CattleFax Grain Market Analyst Mike Murphy.
“The lower input cost will have a direct correlation to improved feeder cattle and calf values in 2014 and, with continued help from Mother Nature, we will be in better shape with regard to hay supply and prices moving forward,” Murphy said yesterday in a presentation at the 2014 Cattle Industry Convention and National Cattlemen’s Beef Association Trade Show.
The conditions should lead to expansion of the beef cow herd sometime this year, CattleFax Senior Analyst Kevin Good said. The herd stood at 29 million head on Jan. 1, down 1 percent from a year earlier, according to USDA, while the total inventory of cattle and calves fell to 87.7 million, the lowest since 1951.
Still, because of continued tight supplies of feeder cattle, feedyards and meatpackers – “the margin segments of the beef production system” -- may face tough times as they struggle with excess capacity, Good said. “Look for continued closure of both packing and feeding entities over the next 12-24 months,” CattleFax said in a news release.
Beef exports in 2014 are expected to be even, with record high prices holding back expansion, Global Market Specialist Brett Stuart said at the presentation. That’s not all bad, since the U.S. Meat Export Federation said shipments of U.S. beef overseas through November had already reached a record $5.61 billion for 2013, and that the total for the year will probably be about $6 billion.
Prices are expected to average $135 per hundred pounds, a 7 percent increase from 2013. Yearling may average $168, up 13 percent, according to Good, calf prices will average $193, up 13 percent, he said.
“After years of tightening supplies, the cow-calf sector will again remain in the driver’s seat during 2014,” Good said.
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