The national beef herd hit a 73-year low in January 2024 at 28.2 million head. Beef herd numbers have increased slightly to 28.7 million head, according to the U.S. Department of Agriculture July cattle inventory report, but cow-calf prices continue to reach new heights.
Cleere said feeding cattle to heavier weights has helped make up for lower cattle numbers, but beef production is down year-over-year overall. Cleere said the herd size coupled with strong consumer demand at the retail level has continued to fuel historically high prices for cow-calf producers.
“Retail prices are high, but there is still strong consumer demand,” Cleere said. “On the other end of production, you have ranchers capitalizing on record calf prices and asking, ‘How long are these high calf prices going to last?’”
Cow/calf biology weigh on U.S. beef market
David Anderson, Ph.D., AgriLife Extension economist in the Texas A&M Department of Agricultural Economics, Bryan-College Station, said low herd numbers and fewer market-ready calves are fueling record high prices at all levels of the beef market.
“We’ve got record high calf prices and record high fed cattle prices, and that is fueling record high beef prices on the wholesale and retail side,” he said. “Beef supplies have been particularly low since April while the demand from meatpackers and ultimately consumers has been strong.”
Nationally, Anderson said 300-400-pound calves were averaging $4.67 per pound while 500-600-pound calves were bringing $4.17 per pound on average. Localized sale prices have been even higher.
A weekly price-trend report by Jason Banta, Ph.D., AgriLife Extension beef cattle specialist, Overton, shows the average high price reported by six Central and East Texas auctions was $5.25 per pound for 300-400-pound calves and $4.70 per pound for 500-600-pound calves.
Anderson said the present market is also a good snapshot of how beef production cycle dynamics can influence supply and ultimately prices throughout the year.
Springtime is calving time for most cattle operations, he said. Those spring-born calves will go to auction in the fall. That influx of supply tends to create a price low point for the year whereas fall- and winter-born calves are hitting the market through spring and summer.
“It’s the biology of when calves are born and how fast they grow,” he said. “A decent number to go by from birth to finishing weight is 18-20 months, and that cycle can ripple through the sale barns all the way to the grocery store.”
Source : tamu.edu