Wednesday, December 07, 2011

Strong Cattle Market Forecast for 2012

AgFax.Com - Your Online Ag News Source


A classic case of supply and demand is predicted for the cattle market in 2012, according to a Texas AgriLife Extension Service economist.

Declining cow numbers due to drought will lead to fewer calves, causing tighter supplies across the U.S., said Dr. David Anderson, AgriLife Extension livestock economist.

Dr. David Anderson, Texas AgriLife Extension Service livestock economist, forecasts strong cattle prices for 2012. The historic drought in Texas has caused a decline of more than 600,000 cows, which will lead to fewer calves marketed next year. (Texas AgriLife Extension Service photo by Blair Fannin)

“I think we will continue to maintain historically high prices,” Anderson said recently at the Brock Faulkner-Brazos Valley Fall Cattleman’s Clinic in Bryan.

Anderson said his 2012 target prices for 600 pound steers are $131-$138 per hundredweight during the first quarter, $136-$144 in the second quarter, $137-$147 in the third quarter and $133-$143 in the fourth quarter.

The historic drought this year marked the biggest one-year decline in Texas cow numbers ever with more than 600,000 sold by cattle producers, Anderson said.

“What does this mean? We’ve got fewer cows and calves, which means higher prices,” Anderson said.

Cattle on feed numbers are high, which is consistent with a drought, Anderson said. Feedlots have been “staying current,” he said, selling animals to packing operations at a steady clip.

Meanwhile, slaughter steer prices hit a high of $125 per hundredweight in April and a low of $105 in June, Anderson said.

“They went back up to $119 per hundredweight in October,” he said.

That’s likely the result of buyers making sure enough beef is in grocery stores to satisfy first-of-the-month specials, Anderson said. “Prices shoot forward, then back off as grocery outlets buy what they need, then pull back due to the economy.”

Nationally, a 12 percent decline in 2011 in beef cow inventory is the second largest decline in history since 1934-1935 (18 percent), as 550,000 head of cows were sold off during that time. In 1996, a decline of approximately 400,000 cows was recorded during that drought year, Anderson said.

“In 2012, beef production is predicted to be down 4 percent,” he said.

The choice-select spread has choice beef selling for “huge amounts” more than select because exports are booming, Anderson said.

“We have growing demand for choice beef,” he said.

Wal-Mart, the largest grocery retail outlet in the U.S., is also selling more choice beef, Anderson added.

Trends of consumer buying patterns indicate during the beginning of the recession in 2008 consumers were trying to “stretch their dollar by buying more hamburger,” he said. “As a result, hamburger, chuck and rounds have reached record prices.”

However, there’s been growing demand for steaks, Anderson said, so “perhaps the economy is not as bad as some might think since there is some willingness to buy more steaks.”


Leave a Reply

Name and Email Address are required fields. Your email will not be published or shared with third parties.

Sunbelt Ag News

    DTN Livestock Open: In Cattle, Maybe Moderately Higher Early2-27

    South Carolina: Got Wild Hogs? Time To Speak Up.2-27

    DTN Grain Open: Brazilian Trucker Strike Lifts Soybeans2-27

    Louisiana Rice: Losing Methyl Bromide Creates Challenge For Bin Insect Control2-27

    Grain TV: Disappointing Export Sales2-26

    DTN Livestock Close: Futures Hit by Bullish Explosion2-26

    Iowa Senate Approved Tougher Restrictions on Manure Applications – DTN2-26

    NFL Star Turned Farmer Engages Youth, Community Through Ag – DTN2-26

    Chumrau on Wheat: USDA Forecasts Higher Production in 2015-162-26

    Corn Yields: Expectations for the 2015 Average – What Does History Teach Us?2-26

    ELS Cotton Competitive Payment Rate Is Zero2-26

    NRCS Invests $84M Natural Disaster Funds in 13 States2-26

    Georgia: Crabgrass Control Depends on Soil Temperatures2-26

    DTN Cotton Close: Bounces Off New High2-26

    Climate Corporation To Deliver Enhanced Climate Pro Service At $3 Per Acre2-26

    Early Spring Best Time to Test and Tune Farm Machinery2-26

    DTN Grain Close: Soybeans Enjoy Strong Commercial Buying2-26

    Ag Conservation Easement Program Accepting Comments on Final Rule2-26

    DTN Livestock Midday: Buyers Jump Back Into Cattle2-26

    DTN Grain Midday: Good Demand for Corn, Soybeans2-26

    DTN Cotton Open: Trades Mixed on Heels of Export Data2-26

    Pesticide Drift: Calm, Still Days Are Most Dangerous – DTN2-26

    Livestock: Port Resumptions Bring Meat Industry a Sigh of Relief – DTN2-26

    Keith Good: Global Soybean Issues; Vilsack on Crop Insurance; Food Stamps Re-Revisted2-26

    Farm Bill Deadlines Approach: 17 Questions – Answers for Landlords2-25

    Doane Cotton Close: Lack of Deliverable Supplies Supports March2-25

    U.S. Energy: ExxonMobil California Refinery Outage – Implications for Oil Markets2-25

    Propane Inventories, Prices Dip2-25

    Gas Prices Continue to Climb2-25

    Diesel Prices on the Rise2-25

    DTN Cotton Close: Futures Rally Off Early Losses2-25

    DTN Grain Close: Soybean Prices See-Saw Lower2-25

    California: 9 Counties Designated Natural Disaster Areas2-25

    Arizona: 2 Counties Designated Natural Disaster Areas2-25

    Farm Management: 4 Cost Control Plans to Make Ends Meet – DTN2-25

    Texas: Sutton County Designated Natural Disaster Area2-25

    Brazil Soybean Harvest: Truck Driver Blockades Hit Farmers Hard – DTN2-25

    Texas: Planter Clinic, Dimmit, March 112-25

    South Carolina Peach Farmer Honored for Achievement in Produce Innovation2-25

    Keith Good: Exports Damaged by Port Delays; Ethanol Production Cutting Back2-25

    Keith Good: Senate Ag Committee Hears from Farmers2-25

    Crop Insurance: ARC Payments Pretty Good for 2014 Corn2-24

    AFB Grain-Soybean Close: Soybeans Hit by Positive Demand2-24

    AFB Cotton Close: Dec. Tests Resistance2-24

    AFB Rice Close: Another Big Crop Expected2-24

    Revenue Insurance: The Upside Down Safety Net2-24

    USDA: Weekly National Peanut Prices2-24

    DTN Fertilizer Trends: Slow Climb Higher; Canadian Rail Strike Fuels Prices2-24

    No More Cuts: 392 Farm, Nutrition, Conservation Groups Urge Congress to Stop – DTN2-24

    Looking at Biodiesel Through a Chicken House Window2-24

    Biofuels: Novel Pretreatment Could Cut Costs by 30% or More2-24

    Welch on Grain: USDA Projects Reduced Acreage2-24

    Welch on Wheat: Texas Crop Still in Great Condition2-24

    Fertilizer: Verdesian Adds Polymer-Based Option To UAN Protectant2-24

    Beef: Gift To Missouri State – Land, Cattle And Vast Expertise – DTN2-24

    Planting 2015: Decisions Before The First Seed Drops – DTN2-24

    Cotton – How Do They Make Blue Jeans Blue?2-24

    Georgia: 3 Counties Declared Natural Disaster Areas2-23

    New York: National AgrAbility Training Workshop, Rochester, April 13-162-23

    Midwest: Clear a Path for Irrigation Systems, Purdue Expert Advises2-23

    Planter Maintenance: 17 Points Not to Overlook – DTN2-23

    North Carolina: Wilson Regional AG Summit, Lucama, March 122-23

    Projected Soybean Plantings Are Surprisingly Low2-23

    Wild Hogs – Is This The Ultimate Trap Or What?2-23

    Farm Succession: 3 Ideas for Mastering the Transition – DTN2-23

    Income Tax Primer: 19 Points to Know About Trusts and Estates2-23

    Drones: FAA Planned Regulations. Batman Won’t Like 1 of them.2-23

    Flint on Crops: Soybean Planting Methods May Increase Profit2-23

    WTO Ag Rules: Some Countries Not in Compliance2-23

    Sunbelt Ag Events

     

    About Us

    AgFax.Com covers agricultural trends and production topics, with an emphasis on news about cotton, rice, peanuts, corn, soybeans, wheat and tree crops, including almonds, pecans, walnuts and pistachios.

      

    This site also serves as the on-line presence of electronic crop and pest reports published by AgFax Media LLC (formerly Looking South Communications).

        

    Click here to subscribe to our free reports.

      

    We provide early warnings and confirmations about pests, diseases and other factors that influence yield. Our goal is to quickly provide farmers and crop advisors with information needed to make better and more profitable decisions.

         

    Our free weekly crop and pest advisories include:

    • AgFax Midsouth Cotton, covering cotton production and news in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Missouri.

    • AgFax Southeast Cotton, covering cotton production and news in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia.

    • AgFax Southwest Cotton (new for 2013!), covering cotton production and news in Texas, Oklahoma, Kansas and New Mexico.

    • AgFax West (formerly MiteFax: SJV Cotton), covering California cotton, alfalfa, tomatoes and other non-permanent crops in California's Central Valley.

    • AgFax Rice covering rice production and news in Arkansas, Louisiana, Mississippi, Missouri and Texas.

    • AgFax Peanuts, covering peanut production in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia.

    • AgFax Southern Grain: covering soybeans, corn, milo and small grains in Southern states.

    • AgFax Almonds, covering almonds, pistachios, walnuts and other tree crops in California's Central Valley.

    • AgCom 101, providing guidance to ag professionals involved in social media.

    Our newsletters are sponsored by the following companies: FMC Corporation Chemtura Dow AgroSciences.

          

    Mission statement:

    Make it as easy as possible for our community of readers to find and/or receive needed information.

              

    Contact Information:

    AgFax Media. LLC

    142 Westlake Drive Brandon, MS 39047

    601-992-9488 Office 601-992-3503 Fax

    Owen Taylor Debra L. Ferguson Laurie Courtney

          

    Circulation Questions?

    Contact Laurie Courtney