The leverage balance between packers and producers is still a major influence on fed cattle prices, and that market ripples down to the other markets such as feeder calves. Tops could be over $2,000 per head, depending on weather and location. Bred cows: They could average $1,850 a head, up $225 from last year.Cull cows: Even they are in high demand for their meat-grinding value, and could be in record price territory at $75 per cwt average, and $85 tops.Feeder calves: (550 pounds): $205 per cwt average for 2022, up $35 from last year.That’s $300 per head more than last year. Fed steers: $140 per cwt average for the year, with tops up to $155.Here’s what else CattleFax predicts for cattle price outlook in 2022. Much of that decline in numbers is attributable to lingering drought over the Great Plains, where 35% of the nation’s cow herd lives.
The good times should last a while with a shrinking beef herd, according to the latest USDA report, which showed cow numbers declined last year to 30.1 million head. “We had record-high retail beef prices last year, along with record pounds of production.” “Beef demand is the highest in 33 years,” he said at the price outlook report. Now, beef producers have gained back most of that leverage, said Randy Blach of CattleFax this week. Markets Analysis Back to Markets Analysis.This form is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Spam protection has stopped this request. Posted by Smith at 5:06am August 29, 2022 While exports are expected to slow in the 4 th quarter as beef production decreases, it does appear likely that a new record for beef exports will be set in 2022. However, the combination of high cow slaughter and early placement of cattle on feed, has kept beef production higher than expected. At the start of 2022, most expected beef export levels to decline, mostly due to an expected decrease in beef production. Through the first six months of 2022, beef exports have been 7% higher than last year. I also wanted to take a quick look at beef export levels as those have not gotten a lot of attention in recent months (see chart below).
But, when combining that with the drought implications, fundamentals are setting up for a seller’s market for feeder calves. Given the continued reduction in the size of the beef cow herd, this was likely to be a smaller fall calf run had weather not been a challenge. Last week, Josh wrote about high placement levels of light weight feeders, which has been another trend due to dry conditions in much of the country. Beef cow slaughter levels have been discussed several times in this newsletter and remain 14% above 2021 levels. It is becoming more apparent that the supply of calves is going to be very tight this fall. The chart below shows steer calf prices in the Southern Plains, which have been increasing through July and August. A strong calf market going into fall is a good sign for cow-calf operators that calve in the spring and will be marketing calves in the coming months. Heavy feeders typically make their highs around this time of year, but calf markets are increasing counter-seasonally. The October CME© feeder cattle futures contract has increased by more than $10 per cwt since May and this can been seen in the market for heavy feeder cattle. The feeder cattle market has really flexed its muscles as we have moved through summer. Kenny Burdine, Extension Professor, Livestock Marketing, University of Kentucky
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