CALF_News_December_2021_January_2022

28 CALF News • December 2021 | January 2022 • www.calfnews.net up from about $120 in 2021. The price will range from $120 to $150, and continue upward through 2025, he explained. Feeder cattle prices are also projected to trend higher the next few years. Prices for 2022 are expected to average about $170/cwt., up from $150 in 2021. Calf prices are forecast at close to $210/cwt., up from a little over $180 for 2021. Despite stretched household incomes during the pandemic, U.S. consumers have continued to demand high-quality beef, Blach said.“Consumers have continued to vote with their wal- lets,” he said.“Demand for Choice and Prime is up 75 percent from 1998. That’s what we must continue to hitch our wagon to. “About 83 percent of our product now grades Choice or Prime. That includes about 89 percent from Nebraska feed- yards, 83 percent from Kansas and over 70 percent from Texas feedyards. We must keep listening to consumers and provide the product they want.” However, rising inflation could impact beef sales as consumers face higher costs.With gasoline prices at $1 per gallon higher at the pump, they’re spending about $500 more a year on fuel,“a large change in disposable income for many consumers,” Blach said.“How much will they have to spend on our products?” Welcome to More Packing Plants Low slaughter capacity, due mainly to the idling of several large packing plants the past eight or nine years, has kept more beef from reaching con- sumers. Blach said that since 2017, fed-cattle numbers have been up to 9 percent higher than slaughter capacity. In 2012, harvest capacity was 525,000 head per 40-hour week. By 2020, it had dipped to 443,000.With the addition of Saturday shifts due to the pandemic, that capacity has risen to about 465,000. But that capacity was to accommodate 509,000 fed steers per week. “We can finally expect those numbers to balance out soon,” Blach By Larry Stalcup Contributing Editor P roducer and feeder markets remain far below the powerful profits currently enjoyed by major packers. But after struggling to breakeven for way too long, CattleFax indicates they should expect to see stron- ger prices heading into 2022 and even better markets through 2025. That’s thanks to continued demand for high-quality beef across America, and an export market that generates more than $400 per head. CattleFax CEO Randy Blach relayed the research group’s analysis to the 54th annual Texas Cattle Feeders Association (TCFA) Convention in Oklahoma City in late October. He was among several speakers on the TCFA program, which included the latest information on markets, government policy and consumer trends that may impact cattle prices. Outgoing TCFA Chairman Scott Anderson of Guymon, Okla., welcomed feeders, producers and allied industry reps to the Sooner State capital. Along with still being one of the nation’s iconic cow towns, OKC boasts a 50-story skyscraper, a refurbished downtown and an NBA team. The sleek Omni Oklahoma City Hotel was a slam dunk convention site for the association, which represents feedyards in Texas, Oklahoma and New Mexico that finish nearly 30 percent of the nation’s fed cattle. With higher production costs triggered by $5 to $6-plus corn and other inputs, it may still be a struggle to generate much of a profit. But Blach said the latest CattleFax projec- tions call for an average fed cattle price of $135/cwt. for 2022, TCFA Convention Rundown Markets Improving but Millennials Play a Key Role LEFT: With a CattleFax projection of fed cattle trading at an average of $135/cwt. in 2022, along with more packer capacity coming online, CEO Randy Blach says producers and feeders should see better returns in the coming years. MIDDLE: NCBA President Jerry Bohn says the voluntary negotiated cash trade system supported by the national association is working and preferred over a government mandated cash trade system. RIGHT: Dynamite demographer Ken Gronbach challenges the beef industry to provide products and marketing angles to reach some 88 million Millennials who are replacing aging Baby Boomers as the leading consumer group. Ben Weinheimer, left, takes the reins from retiring TCFA CEO Ross Wilson.