Record cattle prices predicted
4 August 2008Cattle prices in the US should reach record highs and continue to set records in 2009 and 2010, according to Purdue University Extension Economist Chris Hurt. In a report analyzing current cattle trends, Hurt noted that beef supplies are expected to be about 2% higher in the third quarter, and then drop by 5% in the final quarter of this year. Assuming third quarter live cattle prices average about $97 per hundredweight, and fourth quarter prices near $100, Hurt estimates choice steer prices will average $95 for the whole of 2008, which would be $3 higher than last year's record.
Hurt predicted that in 2009: more acres will come out of the conservation reserve programme and return to crop production; more haying and grazing could be allowed on CRP acres; and the massive surge in corn ethanol demand will begin to level off. According to USDA, 1.1 million CRP acres are scheduled to expire (meaning farmers can return them to production without penalty) on September 30, 2008, with an additional 3.8 million acres due on September 30, 2009, and another 4.4 million acres on September 30, 2010. Hurt said he also expects beef exports to continue to improve. US beef exports surged 34% during the January-to-May period and, given the weak dollar, he expects that trend to continue. All of these changes, if they occur, would be good news for the cattle industry and lead Hurt to expect cattle prices to trend higher over the next several years while also experiencing some relief from extreme feed prices. Source: Meatingplace.com
