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Angus Productions Inc.
Copyright © 2009
Angus Productions Inc.

CattleFax Reports Cattle Numbers, Meat Production at Outlook Seminar

 

SAN ANTONIO, TEXAS (Jan. 29, 2010) — “Both beef production and net supply are down about 10%. From a supply standpoint, beef is extremely bullish,” stated market analyst Kevin Good, at the annual CattleFax Outlook Seminar conducted during the 2010 Cattle Industry Annual Convention in San Antonio. “The supply side looks rosy, but not the demand side,” Good added.

 

Beef production is down, Good explained, because cattle numbers have trended lower due to continuing reduction of the U.S. breeding herd. The last two years have seen large numbers of beef cows go to slaughter and increased feedlot placement of heifers. Fueling the liquidation of cows and limited retention of heifers for breeding is the margin squeeze experienced by cow-calf producers. According to Good, producers have seen returns decline by as much a $100 per head during the last three years.

 

The analyst said the beef cow herd has shrunk by about 300,000 head, compared to a year ago, to approximately 31.4 million head. The tally is expected to decline further in 2010, but at a slower pace. Beyond this year, numbers are expected to stabilize, provided the economy grows and exports of U.S. beef increase. Limited profitability will continue to challenge herd expansion this year.

 

“Cattle-on-feed, as of January 1, is down 2%, compared to last year, and down 6% compared to the five-year average,” Good reported. “Feeder and calf supplies are tighter.”

 

That should lead to fewer fed cattle marketed in 2010. Cattle imports are not expected to change dramatically. Good said commercial fed-cattle slaughter is forecast to be down 450,000, totaling about 26 million.

 

“Carcass weights have been down lately,” Good noted, “but we look for weights to be up by 2% or 3% for the year.”

 

He also expects continuation of the trend toward growing feeder cattle longer, outside feedyards, making in-weights heavier and contributing to heavier carcass weights.

 

Demand is a concern, due to the weakened economy and politically hindered access to export markets. Good said domestic retail volume has seen a modest increase but at lower prices, due to competition from pork and poultry. The volume of beef sold through foodservice continues to sag.

 

All things considered, Good expects cattle prices to improve, at least a little bit, in 2010. Fed steers should average from $86 to $88 per hundredweight. He predicted average prices of $99 to $101 for 750-pound feeder steers and 550-pound calves should average somewhere in the neighborhood of $112. The profitability outlook is only slightly positive for cattle feeders, better for stocker/backgrounding operators and marginal for cow-calf producers.

 

 
Editor’s Note: This article was written under contract or by staff of Angus Productions Inc. (API), which claims copyright to this article. It may not be published or distributed without the express permission of Angus Productions Inc. To request reprint permission and guidelines, contact Shauna Rose Hermel, editor, at (816) 383-5270.