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

    AgFax Grain Review: China Approves Syngenta Corn; Turkey Bans U.S. DDG Imports12-19

    Rose on Cotton: Consider Selling Remaining Spot Cotton12-19

    Livestock: USDA Drops Checkoff Plan Following Appropriations Bill12-19

    Georgia Farmer Sets New World-Record Corn Yield – DTN12-19

    Grain TV: Basis Levels Lower at Many Crushing Plants12-19

    DTN Livestock Close: Cattle Futures Rebound With Triple-Digit Gains12-19

    Doane Cotton Close: Another Choppy Week Ends Slightly Ahead12-19

    Arkansas: State Plant Board Approves Enlist Duo, Dicamba Weed Control Systems12-19

    Mississippi Crop Values to Top $7B for 3rd Straight Year12-19

    AFB Grain-Soybean Close: Wheat, Soybeans Drop, Corn Mixed12-19

    AFB Cotton Close: Mixed as Futures Continue to Consolidate12-19

    AFB Rice Close: Strong Gains to End the Week12-19

    Texas Pecans: Moderate Deliveries, Good Demand12-19

    Oklahoma Pecans: Moderate Early Deliveries Taper Off12-19

    Cleveland on Cotton: India Stirs the Bears; China Releases Reliable Stock Estimates12-19

    Western Region Pecans: Buying Interest Good, Moderate Deliveries12-19

    Georgia Pecans: Increased Deliveries, Smaller Lots12-19

    Alfalfa: Dupont Pioneer Sells Alfalfa Seed Biz To S&W12-19

    Texas Ag Benefits from Normalized U.S.-Cuba Relations, Says Expert12-19

    Brazil Livestock: Small Scale Ranchers Account for Most Deforestation – DTN12-19

    DTN Cotton Close: Narrowly Mixed on Light Volume12-19

    USDA: Peanut Price Highlights12-19

    AgFax Peanut Review: Spray Fungicides at Night; New Peanut Butter and Chocolate Ice Cream12-19

    DTN Grain Close: Wheat Pulls Back As Ruble, Oil Rally12-19

    Mississippi Soybeans: Record Yield Valued at $1.17B12-19

    DTN Livestock Midday: Feeder Cattle Post Strong Gains12-19

    DTN Grain Midday: All 3 Markets Trading Lower12-19

    Weekly Cotton Market Review12-19

    Mississippi Outdoors: Feeding Wildlife in Winter Can Cause Problems12-19

    DTN Cotton Open: Ticks Quietly Just Below Unchanged12-19

    AgFax Wildlife Review: Oklahoma Man Faces Felonies Over Wild Hogs12-19

    DTN Livestock Open: Futures to Begin Solidly Higher12-19

    DTN Grain Open: Wheat Futures Plummet12-19

    Keith Good: New Cuba Policy Could Open Huge Market for U.S. Wheat12-19

    DTN Livestock Close: Cattle Futures Pull Out of Price Collapse12-18

    Nitrogen Fertilizer: Oversupply, Geopolitical Risk Overshadow Strong Global Demand – DTN12-18

    China Holds Grain Import Quotas Steady, Revises Application Process – DTN12-18

    Doane Cotton Close: Choppy Sideways Action Continues12-18

    Chumrau on Wheat: USDA Raises World Estimates, No Comment on Russian Rumors12-18

    Georgia: 2015 Ag Forecast Meetings in Mid-January12-18

    John Deere Sells Crop Insurance Arm To Farmers Mutual Hail12-18

    Japan Elections Won’t Soften Trade Issues — DTN12-18

    U.S. Grain Transportation: Rail Shipments Make Big Jump12-18

    DuPont Pioneer Rolls Out New Soybean And Corn Selections For 201512-18

    Updated ARC-CO and PLC Payment Indicator for 2014 Crop Year12-18

    Livestock: Sharp Cattle Declines as Inscrutable as the Grinch – DTN12-18

    U.S. Drought Outlook: Improvement Expected Across California12-18

    Ag Trade Should Benefit from Thaw in U.S.-Cuba Relations12-18

    U.S. Energy: Heating Oil Expenditures Expected to Drop This Winter12-18

    Gasoline Prices: Decline in All Regions12-18

    Propane Stocks: Decrease by 0.8M Barrels12-18

    Diesel Prices: Average Drops 12 Cents12-18

    Virginia Govt. Joins USDA, EPA in Fighting Nutrient Runoff – DTN12-17

    Louisiana Pecans: Deliveries Very Light, Few Improved Varieties12-17

    Tennessee: TAPA Winter Agronomic Workshop and Cotton Focus, Jackson, Feb. 11-1212-17

    Crop Insurance: Supplemental Coverage Option Unavailable When Choosing ARC Programs12-17

    Crop Insurance: Choosing Between Base Acre Allocation Alternatives12-17

    Senate Passes Tax Extenders Bill with Key Provisions for Ag — DTN12-17

    Brazil: Amazon Deforestation Issues Concern Ag Communities – DTN12-16

    DTN Fertilizer Outlook: Global Phosphorous Demand to Increase12-16

    USDA: Weekly National Peanut Prices12-16

    Buying Local Not Without Risks, Study Finds12-16

    U.S. Ag in Strong Position with High Avian Flu Risks Elsewhere in ’1512-16

    Grain Markets: 50-Day Moving Average Never Out of Style — DTN12-16

    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