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Cattle Market Rebound Follows Long, Dry Year
MISSISSIPPI STATE -- Cattle prices are rebounding after numbers of animals dumped on the market peaked in drought-stricken areas and with the anticipation of another year of fewer calves.
"Early in the year, we had an optimistic outlook for the fed cattle market, which led to feedlots keeping cattle longer than normal waiting for better prices," said Dr. Charlie Forrest, marketing specialist with Mississippi State University's Extension Service. "Longer-than-normal days on feed led to record-high slaughter weights."
Fewer animals were processed but tonnage was up. Competing meat supplies, especially pork, is up significantly and keeping downward pressure on beef prices.
The drought and low prices drove more cattle to the market during 1998. More cows on the market eventually means fewer calves produced and smaller numbers in the future. Forrest said this will be the third year of declining calf crops.
"An increase in females marketed in recent years will result in smaller calf crops and should boost market prices next year," Forrest said. "The prediction for fed cattle is for prices to average around $72 per hundredweight next year."
The economist said fed cattle prices were in the high $50 range for several weeks in late summer, but were up in early fall. He expects the 1998 average to be around $62 per hundredweight, compared to $66 last year. Steers weighing 400 to 500 pounds were bringing about $70 per hundredweight through much of the summer, which is about $10 below last year's prices.
"Hay will be short in parts of the country, and the drought has hampered growth of winter grazing crops. Hogs will continue to be a factor as well," Forrest said.
Blair McKinley, Extension beef specialist, said the shortage of hay and winter grazing will result in more Mississippi cattle going to the market. Last January's inventory of 670,000 beef cows is expected to decline 3 to 10 percent by the end of the year.
"Cattle producers will need to take inventory of their hay and grass to determine their market decisions. Some inexpensive by-products, such as soybean hulls, corn gluten and rice bran, will help extend hay supplies," McKinley said.
Excluding hobby farmers, Mississippi is trending toward fewer beef operations with more cattle in each one.
"The producers who survive are those who do a good job with record keeping, improving genetics and cutting costs," McKinley said.