By Shelia Grobosky, Content & PR Manager
Earlier this month, I attended the Cattle Industry Convention & NCBA Trade Show in New Orleans, an event I look forward to each year. One of many highlights for me is attending the Thursday morning CattleFax Outlook Seminar, and this year’s outlook was filled with more optimism than I have heard in several years.
That optimism was refreshing and reflected in several areas. Let’s start with the weather pattern. It’s fascinating to see the charts and hear Meteorologist Matt Makens forecast weather patterns for the next nine months. According to Makens, La Nina is on her way out and El Nino is coming, meaning we can (fingers crossed) say good-bye to the drought that has plagued so many parts of the U.S. by summer. This perhaps won’t be noticeable immediately as these weather conditions happen over the Pacific Ocean and impact the atmosphere, and it does take a significant time for the atmosphere over the land to catch up with what is happening between South America and southeast Asia.
Following the principle of supply and demand, it is clear to see why cattle prices continue to climb and hold steady. The drought impacted the cattle inventory in 2022, and according to CattleFax analyst Kevin Good, U.S. cattle numbers are expected to decline around another 1 million head to about 29.2 million. Beef demand remains strong. Good says that in 2022, we had the highest per capita U.S. beef consumption in 12 years at 58 pounds. Still, in the face of that supply we also had record retail beef prices at $7.35 per pound. Beef exports are also still strong, and on average, they add $500 per fed steer to cattle markets.
The other item to note is that consumers don’t just want beef; they want high-quality beef, and they are willing to pay a premium for Choice or Prime. To create that higher quality beef, more dairy cows are being bred to beef bulls to take advantage of the market premiums of beef-on-dairy calves vs. straight dairy calves. Good said that about 7% of fed cattle slaughter is beef-on-dairy animals and anticipated that to grow to 15% by 2026.
Randy Blach, CattleFax CEO concluded the session with an overall positive outlook, expecting improvements in the weather pattern and a tighter supply to distribute more money though all sectors of the cattle industry.
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