Home Indiana Agriculture News CattleFax Predicts Strong Prices to Remain in 2015

CattleFax Predicts Strong Prices to Remain in 2015


Bull + A Rising Stock ChartThe popular CattleFax Outlook Session today at the 2015 Cattle Industry Convention and NCBA Trade Show gave cattlemen and women reasons to be optimistic. Analysts told the capacity crowd to expect fed cattle prices averaging in the mid-$150s, slightly higher than last year. Prices will trade in a range from near $140 at the lows to near $170 at the highs in the year ahead. While early year highs for 550 pound steers will range from near $285 to lows near $235. Analysts cited the improved forage situation, lower grain prices and record margins in 2014 for feeders and stockers as the primary reason cow-calf producers will remain in the driver’s seat for the year ahead.

Despite exceptional prices in 2014, CattleFax CEO Randy Blach said he expects the market peak is behind the cattle industry now. “We put the top in the market in the past year and the signal for expansion has been transmitted,” he said. “We will begin to see some modesty expansion in herd numbers now and that will cause prices to trend lower in the years ahead than what we saw in 2014.”

He explained that growing supplies of cattle and beef over the next several years will rebalance the normal price and margin environment among industry segments.

“Prices will then retreat back to the lower end of the new trading range,” said Blach.

Despite the adjustment, he explained that cow-calf producers will continue to see relatively strong returns over the next four to five years, aided by corn prices expected to average $3.60 per bushel in 2015 and an improved forage production picture.

Art Douglas, Ph.D., Professor Emeritus at Creighton University, presented the annual weather forecast which projects moisture conditions in the United States through the summer.

“El Nino conditions have again built across the Pacific and this will fuel a split jet stream pattern into the Southwestern United States. Moisture will gradually increase in February from southern California to the southern High Plains,” said Douglas. “Snow-packs in the northern Rockies are expected to remain well below normal at 50-70 percent levels while the southern Rockies should gradually build their snowpack through March. As the jet heads east it will pick up Gulf moisture and lead to above normal rainfall throughout the southeast.”

“The pesky ridge in the West will gradually weaken during February and by the spring this will allow moisture to increase in the Pacific Northwest,” he explained. A strong Great Lakes trough is forecast to keep a broad portion of the United States colder than normal through the spring and early summer.”

Douglas said this pattern should lead to delayed planting in the Corn Belt with possible threat of late frosts into the late spring.

“The cool temperatures are likely to persist into early summer and this will slow crop progress but be ideal for corn pollination in July. The silver lining in the forecast is that the Midwest should turn warmer by August and September and this will help speed up crop maturation,” he said.