How Long Will High Cattle Prices Continue?

  Increased production of pork and poultry, combined with less beef in 2015, will limit the price potential for beef at retail. 

A common question of late is, "How long will the high cattle prices continue?" The November WASDE report gives an overview of how the current and expected production of beef related to prices. From a supply perspective, beef production for 2014 is expected to be less than in 2013. The expectation for 2015 is for even less beef production than for 2014. Prices in 2015 are also expected to be higher than during 2014.

The demand side is clouded by other meats. Broiler production for 2014 is expected to be higher than during 2013. Looking at 2015, production is expected to be higher for broilers again and for pork and turkey. Thus there will be slightly less beef, but more competing meats. The upside price potential for beef is limited. That does not say when the impact on other prices, such as for feeder cattle or calves, will occur.

The lower production levels and duration hinge on the pace of expansion. Several indicators are suggesting that cattle herd expansion is occurring. In the July 1 Cattle report there were 29.7 million beef cows and 4.1 million replacements in the U.S.

To read more about beef prices, click here.

 

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