The way 2023 ended points to higher prices for fed cattle in 2024, although the timing is uncertain, said a cattle specialist.
The end of 2023 arrived at a time when cattle producers had a great deal to be thankful for, said Mark Johnson, Oklahoma State University Extension beef cattle breeding specialist, in a letter called Cow-Calf Corner.
Strong cattle prices and historically strong profit opportunities made headlines in the past year, Johnson said. Overall, 2023 closed out as a profitable year for all segments of beef cattle production (cow-calf producers, stocker operations and cattle feeders).
That was historically rare, he said. Current low cattle inventories indicate high value for cattle of all classes for the next several years, Johnson said.
The market value of purebred seedstock should be supported in the future as the nation re-populates with cows, he said. The drought released its grip on Oklahoma and some other grazing areas during 2023; timely rains and good management permitted recovery of grazing lands and hay inventory grew.
Another market analyst said pasture recovery was not universal, however, so producers may not have begun the process of restocking herds.
LOOKING FORWARD
Looking forward to 2024 in the cattle business, Johnson advised keeping the following in mind:
- When the nation’s cow herd inventory starts to increase remains in question, he said. What is certain, however, is the opportunity to “rebuild better.”
Sound selection and mating decisions now will enable cow/calf producers to regrow cow numbers with a biological type that fits their production environment, management and marketing plan, Johnson said. Mature cow size, level of milk, fertility and breed composition all contribute to cows that best fit the production environment.
- It’s not just the cattle, he added. “Remember to manage and care for your soil and plants. Grazing ecosystems can take several years to recover from drought.”
At the beginning of future grazing seasons, managers should give rangeland a competitive advantage over grazing pressure by not restocking until pastures are ready.
- Low cow inventories support higher value of cattle, he said. But, producers were advised to keep input costs, interest rates and feedstuff inventories in mind when making business decisions.
- Finally, the cattle business is based on having an available forage base that cattle can turn into beef, Johnson said. The key to profitability is to find a long-term balance of forage produced, other input expenses and production levels.
It is the ingenuity, perseverance and work ethic of America’s cattle men and women, and ag producers that permit domestic consumers to enjoy the highest quality beef in the world and spend a relatively small percentage of their disposable income on food, he said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $172.51 per cwt to $174.38, compared with last week’s range of $171.19 to $174.19 per cwt. FOB dressed steers, and heifers went for $269.19 per cwt to $272.07, compared with $267.22 to $271.38.
The USDA choice cutout Wednesday was down $6.31 per cwt at $278.03 while select was down $0.01 at $258.85. The choice/select spread narrowed to $19.18 from $25.48 with 138 loads of fabricated product and 22 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.35 a bushel over the Mar corn contract, which settled at $4.65 1/4 a bushel, up $0.01 1/2.
The CME Feeder Cattle Index for the seven days ended Tuesday was $225.85 per cwt, down $3.14. This compares with Wednesday’s Jan contract settlement of $226.07, up $0.65.