Joel Packham

Joel Packham, Cassia County extension educator, gives an outlook on beef and cattle during the University of Idaho outlook seminar in Burley on Dec. 12.

BURLEY, Idaho — With a beef cow inventory that’s still on the rise, a healthy economy and strong demand for beef will be critical for Idaho’s cattle producers in the year ahead.

USDA is forecasting producers will add 180,000 head to the beef cow inventory in 2019 and another 100,000 head in 2020 before leveling off in 2021, Joel Packham, Cassia County extension educator, told producers at the University of Idaho’s annual outlook seminar on Wednesday.

“All this building of inventory can’t help prices,” he said.

The calf crop goes hand-in-hand with cow inventory and is forecast up 0.6 percent in 2019 and 0.3 percent in 2020, and there are plenty of cattle on feed. The number of heifers held for replacement is slowing, but those numbers are still expanding, he said.

“We haven’t turned the corner yet,” he said.

Beef production continues to rise. Even without an increase in the number of animals, the long-term average increase in carcass rates has been 5 pounds per year, he said.

With increasing cattle numbers and a lot of kill plants going out of business between 2000 and 2018, meatpackers hold all the power, he said.

“I don’t see that changing in the near future,” he said.

Packers took a bath between 2012 and 2014 after a drought in Texas took a lot of cattle out of the market. They want to make money, and they will until more capacity is built, he said.

Increased supplies of pork and poultry are also a limiting factor for beef and cattle prices. The good news is, demand for beef is holding, he said.

“The economy is really strong … the industry is producing record amounts of high-quality beef, and demand is responding,” he said.

Exports are also providing a boost, and the export value per head continues to increase. Exports account for about 12 percent of U.S. production, and export value in 2019 is forecast at $360 per head of all fed cattle slaughtered in the U.S., he said.

CattleFax is forecasting average prices for 2019 of $115 per hundredweight for fed steers, $144 per hundredweight for 750-pound feeder steers and $157 per hundredweight for 550-pound steer calves.

“I’m surprised we’re holding the price we are with the amount of supply, he said.

The price for bred cows is forecast at $1,500 to $1,600, with profitability continuing to support bred cow values. But cull cow prices haven’t found a bottom, he said.

“Dairy is not helping the beef industry; they’re dumping cows on the market all the time. The cull cow price is going to suffer,” he said.

Looking ahead, exports must continue and trade issues must be settled. A strong economy is also critical, but a recession could happen any time, he said.

He advised cow-calf producers to find a way to be low-cost and high-return producers.

For years, extension educators told producers to get as much production as possible. Instead they should have told them to get their costs as low as possible, he said.

Sign up for our Top Stories newsletter

Recommended for you