As 2006 rolls to an end, this year of volatility in cattle and corn prices will likely yield to similar conditions in '07, with continued industry pressures coming everywhere from high feed costs and immigration controversies at major packers to struggles with getting export markets back.
That about covered the attitude of Texas Cattle Feeders Association officials at the association's year-end news conference yesterday in Amarillo. Speaking only two days after the nationwide Immigration and Customs Enforcement raids of Swift & Co. plants nationwide, including one in Cactus, TX, TCFA marketing director Jim Gill indicated the impact on live-cattle markets and deliveries seemed minimal in the wake of the Swift shakedown.
"We called yards that had sold cattle to Swift," Gill says. "Many had already shipped last Friday or Saturday. There were still a few to be delivered, but there wasn't much a problem overall."
Cattle prices weren't impacted much, if any, by the plant raids. "Cattle traded in Kansas for $85/cwt. Wednesday (Dec. 15) and $85.50 in Texas," Gill says. "We didn't see a major drop in prices."
On the outlook for future prices, Gill projected '07 first-quarter, fed-cattle prices at $76-$86; second quarter $82-$88; third quarter $84-$90; and fourth quarter $86-$95.
"Prices averaged near $86 ($78-$98) during this year," Gill says. "This was about $1.50 below the previous year, which set a record price of $87.50."
He sees feeder supplies continuing to tighten in '07 for several years as ranchers replace heifers. However, he says the cow herd expansion that started several years ago has slowed or even stopped this year due to drought. Gill expects retail prices to hold steady in the $4/lb. range, due to a level demand.
In the drive to meet export demand, TCFA president Ross Wilson said the association continues to expand its Quality Systems Assessment program for age verification "to meet the needs of the Japanese market."
-- Larry Stalcup