3 Questions for the 2022 cattle market
What will drive this year's cattle market?
Kenny Burdine, University of Kentucky
via Beef Magazine - Jan 12, 2022
From my perspective, cow-calf operators have been as frustrated over the last couple of years as I have ever seen them. Several commodity markets improved a great deal during 2021, but the improvement in calf prices was pretty minimal. In reality, the cow-calf sector has been handed 4-5 consecutive challenging years. Fundamentals appeared to be setting up for price improvement two years ago, but between COVID in 2020 and sharply higher grain prices in 2021, calf markets have struggled to gain any traction at all. I remain bullish on the 2022 market and think we will see our best spring calf market since 2016, but unknowns always exist. So, I wanted to focus this week’s discussion on three key questions that I think will drive this year’s calf market.
How high will fed cattle prices go?
Fed cattle prices typically make their highs in the spring of the year and move downward through summer and fall. Last year, slaughter cattle prices improved by about $17 per cwt from early October to early December, but did pull back a bit as we moved through December. As I write this on the morning of January 10th, April CME© Live Cattle futures are on the board above $140 and the break to the June contract is relatively small. Expectations of fed cattle prices drove heavy feeder values last fall and the prices levels that are actually reached this spring will set the tone for much of 2022.
What can we expect from feed prices? ...
How much more culling will we see of the cowherd? ...
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