NCBA: 2012 Record High Prices but What About Profit?

US – Producers should expect to receive record high prices for all classes of cattle in 2012, as the upward trend continues, said Kevin Good, from CattleFax at the NCBA Convention and Trade Show. But what about profitability, reports Charlotte Johnston, TheCattleSite editor.
calendar icon 3 February 2012
clock icon 1 minute read

Producers can be optimistic about cattle prices in 2012, said Mr Good. However high prices do not mean profitability.

Retail beef prices will increase to new record levels as the higher cattle and wholesale beef values are passed down to consumers.

CattleFax expects fed cattle prices to average $122/cwt in 2012, with feeder cattle prices expected to improve $145 per head, reaching a US average near$150/cwt for a 750-pound steer.

Calf prices are likely to vary 15 per cent in 2012. The annual high to low would put calves in a range of $162 to $188/cwt with seasonal highs expected this Spring.

Higher calf values in 2012 are expected to increase bred female prices.

However for feeders 2012 will be a tight year, with many seeing negative returns. To minimise this risk management is a must, said Mr Good.

For the stocker/ backgrounders, traditionally the most profitable part of the cattle business, 2012 is still positive but margins will be narrower due to high calf values, warns CattleFax.

In the driving seat in 2012, and likely to remain there in coming years are the cow/calf producers, said Mr Good. Margins are expected to be positive, with high calf values more than offsetting increasing input costs.

Charlotte Johnston, Editor

Charlotte Johnston - Editor

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