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Blach expects prices to go up in 2023

published: January 6th 2023
source: Kansas Livestock Association

With a shrinking U.S. cattle supply and more shackle space available, cow-calf producers and feeders are starting to see leverage shift in their favor, CattleFax Chief Executive Officer Randy Blach told those attending Beef Industry University, which was sponsored by the Farm Credit Associations of Kansas in late 2022.

     “We are seeing front-end supplies become as current as they’ve been in the past four to five years,” he said. “We should not be surprised if demand weakens slightly, but we still look for prices of all classes of cattle to be record high in the next three to four years.”

     Blach predicted 2023 calf prices will go up, averaging $225/cwt., with an annual range of $200/cwt. to $250/cwt.

     “Cow-calf producers stand to increase profitability, and we continue to see a wide price spread, with premiums for those who are focused on using genetic selection to produce high-quality beef,” he said. “We’ve seen record price signals demanding more of that product, so that will be a major opportunity for those who make that investment to get paid.”

     According to Blach, average feeder prices are expected to range from $180/cwt. to $215/cwt., with fed cattle prices increasing to $156/cwt. He did warn, however, that the recent drought-induced cow liquidation means cattle on feed numbers will be down 3% to 5% next year, which could be beneficial to some and unfavorable to others.

     “This could be a profitable stage of the cycle for those who retain ownership of cattle in the feedyard,” Blach said. “But, it could be a tough stage for feedyard operators.”