The crystal ball outlook shows more challenges ahead for U.S. beef producers. That’s according to Livestock Market Information Center Director Jim Robb. He shared his price outlook with Eric Atkinson for his Agriculture Today program for Kansas State University. With herd expansion underway, there will be larger beef supplies and lower prices next year. Robb said some of the indirect headwinds from 2015 could moderate in 2016.
"To help counterbalance some of the increase in beef production, rather clearly I think our forecasts are, we’ll have year-to-year decline in beef imports especially from Australia and we’ll. probably have a little less competition coming from the competing meats, especially the pork and chicken," Robb said. "We really felt in the last two months, the bulk of the large year-to-year increase in U.S. chicken and pork output and those are moderating rather quickly, especially on the chicken side. So the year the year increases in 2016 in those competing meats will be much more modest."
In 2016, there will be will larger beef production. Robb said the U.S. will see its first year over year increase in total cattle slaughter since 2013. He thinks overall there will be cyclically lower cattle prices, but it won’t be as dramatic as recent weeks.
"The rate of decline compared to times in the fourth quarter probably moderates in both 2016 and 2017," Robb said. "So, all these factors will have to come together. The export markets have been very soft and the domestic economy still has some mixed signals."
In looking ahead to this next year, Robb forecasts that cattle prices will be profitable for cow-calf operations, but difficult times ahead for stocker operations. He said the spread between calf and yearling prices will pressure margins. As far as the outlook for feeders, Robb predicts returns will get back on track after a brutal 2015. He also looks for herd expansion to continue for the U.S. in 2016 and 2017, unless there is unusual outside pressures put on the cattle market.
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