Market Outlook:
An Industry in Transition
by Kindra Gordon, field editor, Angus Journal
RAPID CITY, S.D. (Dec. 5, 2013) — Transition will be the theme for 2014 said CattleFax’s Chad Spearman as he provided a market outlook presentation Dec. 5 to attendees of the Range Beef Cow Symposium in Rapid City, S.D.
“Be plugged in; things can change. There’s never ‘no risk,’” CattleFax’s Chad Spearman cautioned.
“There’s a lot of opportunity ahead with cheaper feed costs and improved weather conditions. The beef outlook is optimistic, especially for cow-calf producers,” Spearman said in his opening remarks.
He noted that the Southern Plains, Northern Plains and Southeast — three regions where the bulk of the cow herd resides — have all seen improved moisture and forage conditions, which is bolstering optimism for 2014.
Additionally, Spearman said corn prices are expected in the range of $3.50 to $5.50 per bushel (bu.) over the next two years — down from the highs of $7 per bu. a year or two ago.
“We are always one crop away from corn prices going high again,” he said, “but the last two years there’s been more production of corn around the world, so that should lift supplies” and keep corn prices more moderate.
He added, “This should help cost of gains be around 50¢ to 80¢ per pound (lb.) as opposed to $1.30 from a year ago. That’s a huge deal. Cheaper cost of gain and elevated cattle prices mean good demand for calf prices.”
With the optimistic outlook, Spearman says they anticipate herd rebuilding could result in a larger beef inventory by Jan. 1, 2015. Those who have cattle to sell will command premium prices in the year ahead.
Spearman reported that for 2013 fed prices will average near $126 per hundredweight (cwt.) and are expected to average $130 for 2014.
Feeder-cattle prices will average $146 per cwt. for 2013 and are expected to average $165 for 2014. Calf prices will average near $168 this year and $185-$190 per cwt. for 2014.
While the outlook is extremely positive, Spearman concluded by advising cattlemen to “pay attention.”
“Be plugged in; things can change. There’s never ‘no risk,’” he cautioned. “Feed costs look like they will be muted, but focus on what’s going on with trends in the market, especially seasonally,” he emphasized.
Spearman spoke Thursday at RBCS XXIII. Visit the Newsroom at www.rangebeefcow.com/2013 to view his PowerPoint.
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The RBCS is a biennial educational symposium offering practical production management information. It is sponsored by the Cooperative Extension Service and animal science departments of the University of Wyoming, South Dakota State University, Colorado State University and the University of Nebraska.
Comprehensive coverage of the symposium is available online at www.rangebeefcow.com. Compiled by the Angus Journal editorial team, the site is made possible through sponsorship of LiveAuctions.tv and the cooperation of the host committee.
Editor’s Note: This article was written under contract or by staff of the Angus Journal. To request reprint permission and guidelines, contact Shauna Rose Hermel, editor, at 816-383-5270.
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