Markets in 2017 a Pleasant Surprise But Bigger Calf Crops Could Hinder Producers' Future ProfitabilityFri, 24 Nov 2017 11:26:33 CST
Contrary to market analysts’ initial expectations for this year, 2017 has actually surprised everyone, including Jim Robb of the Livestock Marketing Information Center, with a strong turn upward that has been measured in a recent report, that weighed a variety of economic drivers relative to producers’ profitability prospects.
“We did expect up until a couple months ago, until we had this very strong rally in calf prices, driven by the overall marketplace - cattle feeders making money, export demand… a whole host of factors coming together - that this measure of profitability would be a negative this year,” Robb said. “But, the pleasant surprise in calf and yearling prices and rather low feed stuff costs, has turned that to positive - strongly positive.”
Good news indeed, Robb says, adding that this trend will help producers in the cow/calf sector manage their finances, with profits of nearly $70/head. While current prices aren’t quite as high as we have seen in recent years past, they are certainly better than those we saw last year. However, with larger calf crops on the horizon for the next couple of years, Robb cautions that this scenario could pose some profitability problems.
“These increasing supplies are still something the market will need to deal with and will be a driver in the margins, in the next two years ahead. And, we shouldn’t bank that we’ve cyclically turned higher on cow/calf returns,” he warned. “They’re still under some pressure from the supply side.”
Listen to Robb explain the current market situation and what producers should watch for over the near future, with Radio Oklahoma Ag Network Farm Director Ron Hays, on today’s Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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