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COULD CATTLE The Midwest Cattleman · September 14, 2023 · P12
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that we're beginning to see in
geography with expertise in the marketplace."
grains, livestock, and policy. Brown says economists are
still concerned about the lack
Cattle Prices Could Climb of profitability currently pro-
Continued consolidation in jected for pork producers, but
livestock is a major concern they are turning more opti-
for economists. The survey mistic on prices.
was completed on the heels of "As we've done the last
Tyson Foods and Smithfield couple of months, prices have
announcing plant and farm recovered and economists'
closures for both pork and outlooks have gotten a little
poultry. However, economists brighter, even though we're
think consolidation in cattle talking about some fairly low
will also be a major theme in prices. Dairy is the one that cattle. So the idea is that these $125 billion to $130 billion.
2024, and it could have an im- still sticks out as the worst, industries are going to contin- According to Brown, that’s not
pact on major meat processors and our survey basically shows ue to adjust. And I think 2021 the record $160.2 billion U.S.
as ag economists think cattle not a lot of change for prices and 2022 were just such phe- agriculture saw two years ago,
prices could push even higher, with a projected $20 (per cwt) nomenal demand years that but Brown points out that it’s
a trend that could continue for for the all milk price forecast they almost masked what still high.
at least another year. for the next 18 months or so. If were some very high costs “It just reminds me to say
The August survey also the costs stay where they are faced by all of the segments of not as good as where we were
asked economists when they today, it makes that a pretty the livestock industry." a couple of years ago, but also
think cattle herd expansion tough industry to participate maybe not as tough as some
will start to take place. The in.” Consolidation Concerns would have thought once we
majority think cattle contrac- The survey also asked econ- started to see these lower
tion will continue for at least Massive Consolidation? omists to explain the reason- prices,” says Brown.
another year. A smaller per- What factors could impact ing behind their herd expan-
centage think it could happen livestock prices over the next sion forecasts. Consolidation Corn vs. Soybeans Price
in the second quarter of 2024. six months? The main theme was also a major theme as Projections
"It will probably be late continues to be tighter cattle economists explored what the Ag economists are more op-
2025 or 2026 before we see supplies and demand. current state of the cattle in- timistic about soybean prices
significant increases in beef •"Beef cattle supplies will dustry could mean for the fu- than they are corn prices, and
production. So if demand at continue to tighten, and beef ture of agriculture. one of the main reasons is de-
all stays with us, we can be production will continue fall- •"I do think consolidation mand. According to the latest
talking about these kinds of ing. Beef demand remains re- of all parts of the beef indus- Monthly Monitor, economists
lofty prices for several months markably resilient," says one try is coming. I think this will indicate soybean prices will
down the road," says Brown. ag economist. be a time when some of our trend higher not just this year
"I kind of wonder when we •"Factors impacting live- well-established 100-cow op- but also for the 2024/25 crop.
talk about changing structure stock prices include U.S. erations will think about exit- For corn, the survey shows the
whether or not the cow-calf herd liquidation, global meat ing," says one economist. opposite with the expectation
industry will look different. So availability and domestic de- •"We will see prices that for corn prices to fall.
maybe bigger operations, per- mand," says another econo- significantly surpass 2014- "On the crops side, the
haps some of the smaller beef mist in the anonymous survey. 2015. Processing plants will one to be optimistic about
cow operations will have re- •"Consumer demand consolidate due to fewer cattle is soybeans," says Brown.
tired. And we won't see those will impact livestock pric- available to process. Produc- "According to the latest Ag
back. So I’m curious to watch es the most in the next ers will be slower to expand Economists’ Monthly Moni-
consolidation, what's been six months," the survey re- than in 2014-2015 because of tor, economists say soybean
probably the slowest segment veals. continued drought and high- demand is certainly stronger
of agriculture to consolidate "We asked folks a lot about er borrowing costs. I expect than we might see in a com-
over time." what they see as important the high prices to last longer modity like corn, as biofuels
The survey shows ag econo- in the livestock markets as than in 2014-15," says anoth- and renewable diesel will all
mists think cattle prices could we look ahead, and we did er economist. continue to maybe drive some
climb even higher over the see that consolidation word •"Further reductions in crushed demand as we look
next year. come up, especially in cattle slaughter will put continued ahead."
"Not only have cattle pric- markets," says Brown "So al- pressure on beef processors Brown says, as a result,
es been moving higher, but though we're talking about re- while boosting prices for cat- economists are also more opti-
our economists have been up- cord cattle prices, and maybe tle producers," one economist mistic on soybean prices mov-
ping their estimates of cattle at some point record profit- says in the anonymous survey. ing forward compared to corn.
prices to the tune of about ability, although not today, I •"The impact of the small- Part of the concerns are due
$10 [per head] over the last think there's a lot of concern est beef cow herd in 60 years to an expectation for yields to
couple of months," says Scott about what this does for the will likely put pressure on increase, but the other is the
Brown, interim director of the industry long-term. processing and retail mar- negative outlook for demand.
Rural and Farm Finance Poli- "I think packers are going gins, may give a more compet- “On the corn side, a little
cy Analysis Center who also to be in an awful difficult spot itive advantage to competing less optimism. I would say
helps author the Ag Econo- here for a period of time," proteins, and could result in weak demand in exports, in
mists’ Monthly Monitor. "So Brown adds. "Feedyards could a smaller industry going for- particular, seem to be a lot of
a lot more optimism. I think also be in a tough spot. It's ward," one economist says. what we have answered back
that just has a lot to do with tough to keep yards full with The ag economists surveyed
the short supplies of cattle the lack of supplies of feeder expect net farm income to hit continued on page 14