What Do Cattle Market Trends Look Like Into New Decade?

Weather, consumer demand, international conditions, labor and commodity prices; the list goes on.  With a new decade upon us, producers are keeping an eye on the markets and the factors that play into ensuring their operation stays successful.  So, what should producers expect?

“Markets are not where they have been the last year or two, they have come down a little bit," said CattleFax analyst Duane Lenz.  "We are reaching kind of our peak in supplies, we’ve expanded over the last few years so we are finally getting to peak on those expansion years. So, supplies are starting to weight on us. Feed yards are losing some money and that is filtering back to feeder cattle and calves, as well. Demand both domestically and exports is good, we expect that to pick up, over the year. So right now, consumers staying with beef, U.S. beef; especially beef with grade. You know right now we have been saying highs next year around $125, lows around $95.”

Lenz noted the Choice-Select spread is as large as ever.  He recommended that producers find ways to elevate cattle grade to capitalize on the current trends

“The Choice-Select spread right now, as we speak historically, would be about $8 or $9 dollars, right now is $23-24. So that’s about $15 per CWT you gain from producing a Choice carcass rather than a Select. Then there is another $30-40 premium, prime over choice on top of that per CWT.”

Lenz continued, “It’s the little things along the way,” which ultimately will make a big impact on your bottom line.

“Tighten up the belt a little bit if you can, like I said prices probably won’t go up a lot in the next year or two," Lenz said.  "Do what you can in retaining ownership, especially Angus producers that are producing quality beef that will grade choice or better, there is some things to look at there. Continue to gather data and be able to use that data in the market place because that’s how we are becoming more data driven all the time. So just look for different avenues, maybe change up the timing on how you sell cattle compared to what you have historically done.”

In ever changing conditions, it’s important to adjust your operation to meet the needs of the current markets.

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