An increasing demand for beef coupled with a tighter cattle supply is leading to better balance within the industry, which should result in higher prices for the cow-calf, stocker/feeder and fed cattle segments, CattleFax Chief Executive Officer Randy Blach told those in attendance at last week’s KLA Convention in Wichita. During his presentation in Beef Industry University, which was sponsored by the Farm Credit Associations of Kansas, Blach predicted calf prices will average on top of $200/cwt. in 2022, while feeder prices will average from $165/cwt. to $175/cwt. for the year, with a range of $155/cwt. to $185/cwt.
“For those of you in the stocker business selling cattle off the Flint Hills, by the time we get to that time of the year, I would expect live cattle feeder prices to be trading in the mid $180s,” he said. “For those of you in the cow-calf business, I know it’s your time for a payday and it’s coming. We see calf prices getting back up to the mid $250s over the next two to three years in the cycle.”
According to Blach, fed cattle prices will average from $138/cwt. to $140/cwt. in 2022, with prices approaching a high of $150/cwt. at some point in the spring and pushing up to $160/cwt. in the fall. In addition to potential inflation impact and limited shackle space concerns, Blach also acknowledged frustrations with price discovery and the desire to improve market transparency, but stressed the importance of grid marketing in the overall economics of the industry.
“If we were to take the grid systems that are paid today out of the market, we would lose $1 billion just at the cattle level,” he said. “Those of you in the cow-calf and stocker business, that’s coming off your top line, and many of you have built genetics around that, so you have to have access to those systems if you’re going to get paid.”
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