Questions For The Cattle Industry

Three questions for the US cattle industry entering 2018, according to Josh Maples, assistant professor of agricultural economics at Mississippi State University.

Maples posed the questions to members of the Livestock Marketing Information Center in the weekly “In The Cattle Markets.”




The first question posed was “What is the state of herd expansion?”

A good measure of this comes with the annual USDA Jan. 1 Cattle Inventory report on Jan. 31.  He expected the report to show that expansion has continued, but that the rate of expansion had slowed.

The second question posed was “Will US beef exports continue to increase at a rapid pace?”

Exports were a primary reason for stronger-than-expected 2017 prices.  With even more supplies coming in 2018, can export markets exceed expectations again in 2018?

The third question Maples posed was “How will expansion of total meat production affect beef?”

While beef production is increasing, chicken and pork production also are expanding.  This has set the stage for 2018 to be largest total meat consumption year of the past decade.  How will this increased production get sorted out at the grocery meat case by consumers?




Last year was a year that exceeded most expectations in terms of cattle prices, he said.  The market showed impressive strength in the face of larger supplies.

About 1.3 million more calves hit the ground in 2017, and the number of cattle on feed was 8.1% higher on Dec. 1, than a year earlier, and the number of cattle slaughtered last year was about 5% higher than in 2016.

Despite all those increases, 2017 average prices for live and feeder cattle were near or above 2016’s.

Beef trade was a big 2017 storyline because of trade negotiations (or talks of renegotiation) with the US’ biggest trading partners, larger beef exports and market access to China, Maples said.  Japan, South Korea, Canada and Mexico account for about 70% of US beef exports.

Last year began with news about the Trans-Pacific Partnership, a trade deal that would have decreased tariffs on US beef entering Japan, the leading export market.  US participation in TPP fell apart because of larger political reasons, and the US remains at a tariff disadvantage for sending beef to Japan.

There were discussions also of renegotiating the trade agreement with South Korea, the second largest beef export market.

NAFTA renegotiations are ongoing and continue to add a layer of uncertainty to the markets, he said.  Despite the presence of trade discussions, US export markets flourished and were up more than 14% through Oct. 1.

The US also gained access to mainland China in June for the first time since 2003.  Export totals to China were modest as the market adjusts to additional requirements for shipment to China – but the possibilities are large.




No fed cattle sold Wednesday on the Livestock Exchange video auction.  Packer bids were reported Thursday at $121 per cwt on a live basis and at $193 dressed.

Cash cattle sold last week at $123 per cwt live, up $3 from the previous week and at $193 to mostly $195 dressed, up $3 to $4.

The USDA’s choice cutout Thursday was up $0.05 per cwt at $208.67, while select was up $1.70 at $200.86.  The choice/select spread narrowed to $7.81 from $9.46 with 119 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Wednesday was $155.60 per cwt, down $0.30.  This compares with Thursday’s Jan settlement of $149.02, down $0.35.