CALF News Aug./Sept 2018

40 CALF News • August | September 2018 • www.calfnews.net M arket analysts from Cat- tleFax and Texas A&M University see fed- cattle prices pushing past $110/cwt. the third and fourth quarters of this year and push $120 in early 2019. But a lot of questions regarding demand, grain prices, troubled trade policy and overall cattle numbers will determine if there’s a chance for a small but welcomed profit after summertime losses. David Anderson, Texas A&MAgriL- ife Extension economist, and Duane Lenz, CattleFax general manager and analyst, indicate that continued strong consumer beef demand and low corn prices are helping stabilize cattle prices and offset high cattle numbers that aren’t going away. But uncertainty caused by tariff scuffles between the U.S. and China, the EU, and NAFTA partners in the $150/cwt. range in mid-July. “We have to think as movement goes into the fall, prices lose ground into November. A lot of cattle are already off dry pastures. All in all, I look at softer trends moving into the fall. Anderson contends that feeder- cattle prices will remain fairly strong the remainder of the year.“I have been surprised by the strength of feeder cattle prices this year,” he says.“They still seem high relative to fed-cattle prices. But, the demand from feedlots is there. “We continue to place growing num- bers of cattle. I have Southern Plains feeder-cattle prices in the low to mid $140s the rest of the year. Next year, I think feeder-cattle prices will drop into the $130s as supplies expand.” Calf price? Lenz sees a little pressure on 550-lb. calf prices, which were trading in the $150-$160/cwt. range in Oklahoma City in mid-July.“I see the same trends as with feeders,” he says.“Prices appear that they will move lower as we go into the fall. But as we get into the calf runs, I don’t think prices will fall out of bed.” By Larry Stalcup Contributing Editor Tariff Fears Add to Volatility Little Relief Seen in Canada and Mexico, add more volatility to calf, feeder and finished cattle markets. Looking at fed-cattle markets Lenz likes the results of strong demand.“We’re looking for the fed- cattle market to find some lows at near term (late summer),” Lenz says.“Moving through the balance of the year, we see fed prices in the $115 to $120 range into 2019 as demand picks up more into the fourth quarter. Demand needs to stay high in order for prices to stay or go higher. And demand is awfully good right now.” Anderson sees third-quarter prices in the mid-$100 range.“We are producing a lot of beef as we approach Labor Day,” he says.“However, fed-cattle prices have been a little better than I expected, and I think that’s due to even better demand than I expected. “Exports continue to boom, and I think domestic demand is pretty good, too. Packers have made a lot of money over the last few months, and that has fueled their demand for cattle. Even better, that has kept cattle moving and prevented a backing up of numbers in feedlots and increasing weights.” As prices increase seasonally, Ander- son sees fall prices in the low $110s.“I do think we have seen our peak price for the year, back in the spring,” he says. “Next year, I expect the first quarter to average about $120, decline into the upper $110s in the second quarter and average in the low $100s in the summer. Beef production should continue to grow, pressuring prices.” What about feeder prices? Feeder-cattle and calf prices strength- ened in mid-summer as corn and soybean prices fell. Lenz points out that, seasonally,“prices find their highs in the summer,” as feeder cattle futures hovered TOP LEFT: Fed prices were helped by lower corn prices and plenty of feeder cattle. ABOVE: Can feeders hold their prices?