November 14, 2008

                      
Lower US cattle herd seen beneficial for 2009
                           

The US calf and feeder cattle markets may improve next year due to continued reduction in beef cattle numbers, according to a Texas AgriLife Extension Service economist.

Dry weather and higher input costs have led to the reduction in beef cattle numbers, opening the possibility of higher prices amid expected good beef demand for next year, said Dr. David Anderson.

Anderson said while lower supplies have boosted prices for calves, but high feed cost is still a major consideration.

Feed costs are still proving to be a heavy burden despite corn futures having moved under US$4 per bushel, and fuel and energy costs are squeezing the margins of the livestock industry as well, according to Anderson.

"With the state of the economy, calf prices in the spring may be below what we saw this year. We still had fairly high prices during the first part of this year. However, I think we will see higher calf prices during the second quarter of next year. What we may see at the end of 2009 may be higher than now due to tighter calf supplies," Anderson said.

There is a current trend to market heavier calves to offset high feed costs as they require less feeding. Thus Anderson suggested that producers should hang onto the heavier calves, as they are likely to bring in more money next year.