SAN ANTONIO, Texas — The traditional cattle cycle of boom and bust phases may be gone, but volatility is the continuing reality for the beef business. However, the entire U.S. beef chain can expect a profitable 2020, said Cattlefax analysts at the National Cattlemen’s Beef Association convention held in San Antonio, Texas, Feb. 4-7.
“When we look at 2020, all industry segments will be profitable,” said Cattlefax chief executive officer Randy Blach.
He anticipates that about US$500 per head profit will be split among industry players, thanks to continuing strong demand and escalating exports.
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“That is one of the best numbers we have seen in history,” he said.
The best that cow-calf producers could hope for from1980-90 was an average profit of $32 per head, but that improved to a more sustainable level of $239 per head from 2000-16.
Besides producing better beef —80 percent now grades USDA Choice or Prime — exports have also improved steadily, outpacing pork and poultry in the last 10 years.
In 2010, the U.S. exported $4.1 billion worth of beef while pork sales amounted to $4.6 billion and poultry was $3.1 billion. Last year, the U.S. shipped out $8.2 billion worth of product while pork was $6.3 billion and poultry amounted to $4 billion.
While there will be seasonal shifts in live cattle prices, producers can expect a good year.
Cattlefax predicts fed steers will average $120 per hundredweight, ($3 better than last year), 750 pound steers should be $150 per cwt. ($6 over 2019) and 550 pounders will average $170 per cwt. Utility cows should average $65 per cwt. ($5 per cwt. over 2019), while bred cows will be around $1,500 a head. Some of these prices are dependent on corn prices.
Analysts are expecting an increase in corn acres to 94 million aces with spot corn prices ranging from $3.50 to $4 a bushel.
About 7,000 people have gathered for the annual convention held in San Antonio, Texas.
