Although increasing cattle supplies will likely pressure cattle prices across all sectors this year, Kevin Good, CattleFax analyst says robust economic demand, U.S. job growth and higher wages will remain supportive.
"The relatively strong calf market we saw in 2018 will be under pressure this year," explained Good, at Thursday's CattleFax Outlook Seminar in New Orleans. "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."
CattleFax projects 750 lb. steer prices at $130-$160/cwt., with an average at $147/cwt.
Fed cattle prices are expected to be steady this year, 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.
As for cull cows, Good says, "Years of expansion and poor operating margins in the dairy sector are generating more cull cows, which weighs on the markets. The additional supply and the limited packing capacity for non-fed cattle will result in a market which averages approximately $55/cwt. during 2019, with a spring high near $60/cwt. and a fall low in the lower $40s."
Look for more insights from the CattleFax Outlook in Monday's Cattle Current. Tune in to Wes Ishmael's daily podcast on cattlecurrent.com