Cattle Analysts Positive for 2018
By Paige Nelson
“We’ve got a situation where you’ve got a stock market that’s on fire. That’s very supportive to high-end steak houses in particular,” said Kevin Good, senior analyst during the CattleFax 2018 U.S. & Global Protein & Grain Outlook seminar Feb. 1 at the Cattle Industry Convention and NCBA Trade Show, hosted in Phoenix, Ariz. (Notably, the outlook was presented prior to the stock market’s dip a few days later.)
“You’ve also got a consumer-comfort index that’s as high as it’s been since the start of the century,” he continued.
A good stock market and high consumer-comfort index are good news for cattle producers, he said, as consumers have more dollars to spend.
For his portion of the seminar, Good presented domestic and global cattle market forecasts for 2018. To begin, Good commented on the success the cattle industry experienced in 2017. It was a rare time in our history, he said, when all segments of the beef industry were profitable.
This year will continue to see an increase in beef supplies, he noted, but he also expects beef cow herd expansion to come to a close, citing dry conditions and more heifers on feed as clues.
Calf placements in 2017 were up 1.9 million head. However harvest weights were much lighter than the previous year.
With a larger supply in 2018, harvest weights will increase, he projected. Overall, he expects domestic beef production to increase 1.3 billion pounds (lb.) or 5%.
In order to offset the increase in production and stay profitable, Good said cattle producers will have to depend on trade. He expects with a 1.3-billion-lb. increase domestically, trade will improve by 150 billion lb.
From a global standpoint, major beef producers United States, Brazil and Australia are all increasing beef supplies at the same time.
Domestically, CattleFax is forecasting an increase in protein supplies across the board — from beef, pork and poultry. The per-capita supply of beef alone is forecast to increase 1.8 lb. With consumers having more dollars to spend on beef, overall, Good expects 2018 to continue to be a profitable year for cattle producers. His cattle market price forecasts for 2018 are:
• fed cattle averaging $115 per hundredweight (cwt.) (ranging from $100-$130);
• 750-lb. feeder steers averaging $145 per cwt. (ranging from $135-$160);
• 550-lb. steer calves averaging $158 per cwt. (ranging from $135-$180);
• utility cows averaging $60 per cwt. (ranging from $50-$70).
Editor’s Note: Paige Nelson is a freelance writer and cattlewoman from Rigby, Idaho. This article was written as part of Angus Media’s coverage of the 2018 Cattle Industry Convention. See additional coverage distributed through Angus Media channels including the Angus Journal, Angus Beef Bulletin, Angus Beef Bulletin EXTRA, The Angus Report and online at www.angus.org.