Lower cattle prices through winter

by MEAT&POULTRY Staff
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Abundant cattle supplies into February this winter will keep cattle prices from rising, but the long-term outlook for 2010 is better for producers, according to Marty Foreman, economist with Doan in St. Louis, Mo.

"I think we’re looking at some profitability eventually in 2010 compared to the monumental losses of 2009," he told MEATPOULTRY.com. "There will be fewer feeder cattle in 2010. But the important factor will be getting the demand side back on track."

Foreman said that the number of cattle placements "is up sharply, and they’re being placed with heavier weights." But he cautioned that continued lower cattle prices through February does not necessarily mean good times for packers and processors. "Beef production overall will be down three percent this year, but prices are down too. That’s unusual. The demand just isn’t there yet."

He added that the lower-valued U.S. dollar may help American beef exports, but only in a small way. "The export forecast shows that exports will be up just a few percent. Total exports will be lower in 2009 than they were in 2008, and that’s due to the state of the global economy, which isn’t going to change overnight," he told MEATPOULTRY.com.

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