060219 Beef Prices Should Remain Stable For Most Year

The price of beef probably won’t change much in 2006, researchers say, unless additional export markets open up.

“We are growing the herd again,” said Dillon Feuz of Scottsbluff, an agricultural marketing specialist. Feuz spoke at a Cornhusker Economies Management and Outlook Conference in Cozad, sponsored by the University of Nebraska-Lincoln Extension.

Feuz said U.S. beef cow numbers are up by 1 percent from a year ago, and dairy cow numbers are also up slightly.

He said the current tight supply and larger feedlot capacity created high demand and high prices for feeder calves.

According to the UNL publication “Cornhusker Economics,” 550- to 600-pound feeder steers sold for an average of $126.16 a hundredweight a year ago, and $140.88 on Jan. 27.

Feuz said feeder calf prices will stay high in 2006, but probably drop to $120 by the fourth quarter.

Heifer replacements are up 4 percent in the past year, Feuz said, which is another demand for calves. And as calf numbers increase in the next year or two, prices can be expected to drop.

Feuz said prices could be lower in 2007 “particularly if we don’t gain enough export markets to offset that (increased) production.”

He also said U.S. inventory of hogs and pigs has grown steadily since 1998, and pork gained markets lost to U.S. beef.

Forecasts of higher pig crops mean prices could average 10 percent lower or more in 2006.

Feuz also reported that poultry producers are expanding production at a cheaper price, making the markets a little more difficult for beef and pork.

He also said demand has been affected by consumer costs associated with Hurricane Katrina and high energy bills.

Recovery of export markets is still a big unknown for 2006, and more access to these markets, especially Japan, would be good for beef, Feuz said.

At peak sales, foreign buyers purchased 10 to 12 percent of the U.S. beef production. Japan bought one- third of that.

U.S. beef exports were $1.8 billion more than imports, Feuz said. Pork exports have also exceed imports by about $1 billion.

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