November 20, 2013

In addition to high cattle prices and low feed costs, demand in the US and global markets is improving.

Brown added, "So not only do we expect domestic demand for beef to be better as we look ahead to 2014, but the ability to move product into places like Japan, South Korea and China does nothing but continue to help us on the price side."

His forecast has a favourable outlook for the industry, especially cow-calf producers, as it showed a sharp rise in live-cattle futures prices since 2010, from US$80 per hundred to US$135. Cattle supplies falling to a 61-year low has moved cow-calf returns from -US$25 per cow in 2009 to +US$25 in 2012. Brown said that those returns could skyrocket to US$300 per cow next year based on estimates from the Livestock Market Information Centre.

Beef prices continue to improve and are expected to move an additional 2% or 3% higher next year. However, the trend could change if consumers turn to pork and poultry as less costly meat options. A rebounding economy and more disposable income will help keep beef on dinner tables across the country.

The outlook for 2014 and beyond is much more positive than the last four or five years, but unexpected drought could affect profitability.