US cattle industry to exit the expansion cycle
By 2020, the cattle expansion cycle in the US is expected to go flat, according to a forecast presented in Drovers magazine by the Livestock Marketing Information Center.
Uncertainties present in the markets nowadays and potential headwinds for global meat trade could dampen demand for beef, and therefore cattle.
For 2019, analysts predict a rather modest year-over-year increase in beef production, of 1% or 2% and that is to be considered only in normal weather condition. That would be the smallest percentage increase since 2015.
In the first quarter of 2019 fed cattle prices could be below the 2018’s. In subsequent quarters prices are forecast to be similar to a year earlier. A normal 2019 Midwest corn crop would set the stage for steady to modestly higher yearling and calf cattle prices in the second half of 2019 compared to the corresponding quarters in 2018.
If recent trends persist regarding cow and heifer slaughter levels, 2020 could mark the end of the current U.S. cattle inventory build-up. Preliminary forecasts place the beef output in 2020 unchanged to up 2% year-over-year. If the U.S. economy is still growing in 2020 and export markets do not deteriorate, expect modest year-over-year gains in prices forecast during that year, says the analysis.
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