CattleFax market specialists presenting at the 2019 Cattle Industry Convention say they expect markets to continue strong but see a leverage shift on the horizon. The popular annual CattleFax Outlook Seminar drew a capacity crowd Thursday as cattlemen and women gathered to hear expert market and weather analysis.
CattleFax analyst Kevin Good said he expects prices will remain strong, with demand and the economy expected to remain solid. He said price risk remains over the next few years in response to the last five years of expansion. The beef cowherd expansion cycle is believed to be within 1-2 years of being complete.
However, domestic demand remains robust and higher wages and job growth are supportive of prices. CattleFax projects the all-fresh retail beef price to average $5.73/lb., up $.06 from year ago levels, while the composite cutout will rise $4 to average $216/hundredweight (cwt.) during 2019.
Fed cattle prices are expected to be steady during 2019, averaging $117/cwt., with market resistance at the $130-level and downside risk to $100/cwt. at the low end of the trading range, according to Good. He said a larger supply of cattle outside of feedyards coupled with limited profitability in the feeding sector will hinder demand and pressure feeder cattle prices. CattleFax projects 750 lb. steer prices will range from $130-$160/cwt., with an average at $147/cwt. for the year ahead.
“The relatively strong calf market we saw in 2018 will be under pressure this year,” said Good. “However, values in the spring should have the potential to reach the mid-$180s. On the other hand, a larger calf crop and softer demand have the potential to erode prices to the $140-level next fall, so there is certainly more price risk in feeder cattle and calves than in the fed cattle markets in 2019.”
Feed and grain prices are expected to remain stable during the year ahead, with corn acreage increasing an expected 2 million acres to total 91 million acres and soybeans declining 2.2 million acres to 87 million and wheat gaining 1 million acres to total 49 million.
Interview with Kevin Good, VP of Industry Relations, CattleFax –
Kevin Good, CattleFax