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Archive for Friday, December 2, 2011

Analyst: Expect cattle market to stay strong

December 2, 2011

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Consumers can expect to pay more for their beef this coming year if the return of wetter weather allows cattle ranchers to begin rebuilding herds rather than sending cows to slaughter, a leading market analyst told hundreds of livestock producers Thursday.

Cattle prices will likely remain strong for many years, Randy Blach, the executive vice president of CattleFax, said at the Kansas Livestock Association’s convention in Wichita.

Blach said that the number of females slaughtered could drop by a million cows during the next two years as the industry goes from liquidating herds to expanding them.

About a third of the nation’s livestock herds are located in areas that suffered from drought this year, Blach said.

The drought led many producers to send breeding cows to slaughter as hay prices skyrocketed. But if forecasts projecting more rain in those regions hold up, ranchers are expected to keep more of those cows for their operations.

“Lean beef prices are going to get higher,” Blach said.

Beef prices — already bolstered by a strong export demand — had already risen by 14 percent between 2010 and 2011.

They could reach an average of $5 a pound in 2012, according to the CattleFax projections.

In addition to higher beef prices for consumers, the impact of taking 1 million cows out of slaughter will vary depending on the type of livestock operation involved, he said.

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