In this file:


·         CattleFax: Better weather, more optimism in 2020

·         Bigger Supplies to be Offset by Strong Demand- Resulting in Higher Cattle Prices for 2020- The Word from Cattlefax



CattleFax: Better weather, more optimism in 2020

Expect continued volatility but relatively small changes in cattle and beef supplies.


Alan Newport & Burt Rutherford, BEEF Magazine

Feb 06, 2020


The wet weather across much of the U.S. will soon end as the El Niño phase of sea surface temperatures switches back to the warmer La Niña phase.


That’s the forecast from Art Douglas, climatologist for CattleFax and a climatology professor emeritus for Creighton University. Douglas shared his forecast Thursday morning during the annual CattleFax seminar at the Cattle Industry Convention in San Antonio, Texas.


Douglas explained sea surface temperatures (SSTs), which drive the two alternating weather patterns known as El Niño and La Niña, are showing classical patterns of change and are well predicted by weather models to shift this year. Although SSTs along the equator have not yet shifted from cool to warm, SSTs off the coast of Chile are moderating back toward warm and this fits the pattern of shift back toward El Niño.


For most U.S. beef and crop producers, Douglas said this will mean a shift back toward drier and warmer weather patterns. The exception typically occurs in the Pacific Northwest and Southeast. Douglas said the length and intensity of La Niña will influence drought conditions in the Southwest and Plains, although warmer SSTs may influence the northern Pacific Ocean which may slow development of the La Niña weather through the summer.


The shift in SSTs will help relieve drought in Australia, and in fact that appears already to be beginning, he says. Conversely, the shift also typically brings more droughty weather to the Southwest, including Texas. This is concerning for cattle production, concerning the large number of cows that live in Texas, added Kevin Good, one of CattleFax’ analysts.


Douglas said he expects this weather pattern in the El Niño to La Niña transition this year.


This spring colder temperatures will persist into the Great Lakes into March, but above-normal temperatures should happen in the Corn Belt in April and May. He said the western one-third of the nation will stay warmer from late winter into spring, with drier conditions intensifying from Southwest into the central Rockies and Plains through spring.


Douglas said to expect hotter weather across the West and High Plains this summer, although he called for summer temperatures closer to normal in the central part of the country. If La Niña strengthens early, though, the warmth could expand into the Midwest. He added that the Corn Belt will not see a repeat of last year’s floods.


Cattle markets look positive ...


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Bigger Supplies to be Offset by Strong Demand- Resulting in Higher Cattle Prices for 2020- The Word from Cattlefax


Oklahoma Farm Report  

06 Feb 2020


Beef demand is strong and with U.S. cattle numbers plateauing, prices are likely to be stronger in the year ahead as consumers at home and abroad support industry profitability. That was the message delivered today during the popular CattleFax outlook session, held as part of the 2020 Cattle Industry Convention in San Antonio, Texas.


Weather is expected to play a supporting role for agriculture during the year ahead, according to Dr. Art Douglas, professor emeritus at Creighton University. He said that following repeated El Niño events during the past five years, the U.S. will shift to a La Niña pattern, which will shift much of the nation outside of the northwest and southeastern portions of the country toward conditions slightly warmer and drier than last year, which will be favorable for planting and growing conditions during the spring and summer.


CattleFax Vice President of Research and Risk Management Services Mike Murphy predicted that corn and soybean acres will increase during the year ahead, with corn plantings rising 4 million acres to 94 million acres and soybean acreage rising 7 million acres to reach 83 million acres. He predicted 2020 spot corn prices to trade in a range of $3.50 to $4.00 per bushel, down 15-20 cents per bushel from 2019, unless weather issues become a significant factor. He noted, however, that trade could present an upside to the projected prices, particularly in light of the recently signed U.S./China trade agreement.


The heart of the presentation was a look at beef demand and the price outlook for 2020- you can hear Kevin Good with that part of the presentation by clicking on the LISTEN BAR below.


Trade also will play a significant role in beef and cattle markets, according to CattleFax Vice President of Industry Relations and Analysis Kevin Good, who said he expects higher total animal protein production to be offset by strong demand and increasing exports. During the year ahead, Good said record-large U.S. beef production will reach 27.7 billion pounds. However, he projected that increases in beef exports and decreases in beef imports will result in per-capita beef supplies of 58.4 pounds, an increase of just 0.4 pounds over 2019 levels.


“With strong demand for U.S. beef at home and rising demand overseas, the modest increases in supply will be more than offset by a growing consumer appetite for our product,” said Good, who projected all-fresh retail prices will rise to reach an average of $5.87 per pound during the year ahead, an increase of 5 cents per pound over 2019. “Higher wholesale beef values are a reflection of improving domestic and global beef demand,” Good noted, pointing out that CattleFax projects composite cutout prices will rise $3 during the year ahead to reach $222 per hundredweight.


Growing demand and increasing beef prices at the consumer level will be supportive of cattle prices, with leverage beginning to shift away from the packing sector as more shackle space becomes available during the year ahead. Good said CattleFax projects fed steer prices to average $120 per hundredweight during 2020, an increase of $3 from the previous year. Through the year, he noted downside risk to the $108 level, with resistance at the top near the $130 level. Calf prices are also expected to move higher in the year ahead, with 550-lb. steer prices trading in a range of $155 to $180, averaging $170, up $6 per hundredweight from 2019 levels. Feeder prices will also rise, with 750-lb. steers trading from $140 to $160, with a yearly average of $150, also $6 per hundredweight higher than last year’s average.


Good noted that additional supplies of utility cows, the product of several years of aggressive expansion, are likely to challenge the cull cow market. “However, increased demand for lean trim and a decline in the availability of imported grass-fed trim from Australia and New Zealand will be supportive of cow prices,” he said. He projected utility cow prices should range from the low $70 level to a fall low near $55, while averaging near $65 per hundredweight for the year, an increase of $5 per hundredweight over 2019 levels.


CattleFax CEO Randy Blach closed the session highlighting...


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