The Market Trend

Cattle prices have been on the rise for quite some time.   Below is a 60-Day Market Trendline created by The Cattle Range for the week ending February 17, 2018.   This provides a quick overview of our markets and where they might be headed.   The angle indicates direction and velocity of the trend.   The change from 60 days ago is an increase of 8.21%.   According to the latest CattleFax Update, calf prices are up nearly 20% from one year ago.   All of this is great news – but I advise you to be cautiously optimistic.

The challenge we face this year is the same as the one we faced in 2017 – increased supplies of beef.   Beef production for 2018 is expected to be up 4% over last year.   To make matters worse, the supply of pork and poultry are also up from last year.   Higher prices will continue to be contingent upon a strong demand for beef – both domestically and abroad.   Demand for beef, thus far in 2018, has not been disappointing.

The Cattle Range is quoted as saying, “Over the last five years, an average of around 10% of U.S. beef production has been exported, making exports an extremely important factor affecting beef and cattle prices.”   As long as we have a weak dollar, we can expect a strong export demand for beef and other products.

Drought is another factor that could have a negative effect on calf prices this year.   Some, however, believe we may see some relief in the near future.   CattleFax meteorologist Art Douglas, for example, thinks we may see some relief from the drought in three to four months.   Time will tell.

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