One could take a deep plunge into the economic perspectives and trends to analyze the cattle market for the upcoming year. I decided to sift through much of the vocabulary and summarize the key points.
AgWest Farm Credit’s 12-month cattle outlook indicates profitable returns for cow-calf producers and slightly profitable returns for cattle feeders in 2023. Despite record retail beef prices, domestic demand has remained strong, resulting in one of the most profitable years for Northwest cattle producers. Looking ahead to 2024:
Industry Observations:
- Higher open rates have been reported across the Northwest, with some areas experiencing rates as high as 20%, potentially influenced by the lingering effects of drought.
- Feeder cattle futures prices rose steadily in the first nine months of 2023 before declining sharply in the fourth quarter.
- Fewer cattle were shipped in December 2023, with lower live cattle prices likely to be temporary as feedlots work through their current cattle.
Future Trends:
- Cattle prices are projected to trend higher in 2024, benefitting from a shrinking national herd and strong demand for available cattle.
- Rising beef prices pose a challenge due to consumer price sensitivity, with demand needing to hold for retail prices to continue increasing.
Profitability Outlook:
- AgWest producers are expected to benefit from favorable prices and strong returns over the next few years.
- Cow-calf returns are forecasted to be over $500 per head in 2024, setting a record, while cattle feeders face challenges due to higher cattle prices and increased finishing costs.
- Despite global slowdown concerns, analysts predict that cattle industry profits will remain robust.
Ground Beef Retail Value, 2018-2023
