|
"Cow-calf producers will be well-rewarded with very profitable
calf prices, which are likely to continue to fan the desire for
greater expansion," said Chris Hurt. "The current expansion is
expected to extend until around 2010, with the largest beef
production on this cycle coming in 2010 to 2012. "This likely
means several more years of favorable prices as cow slaughter
remains low and heifer retention high."
Hurt's comments came as he reviewed the cattle industry's
prospects in the coming year.
Another year of favorable returns is expected for brood cow
producers, he noted. Larger beef and dairy herds mean growing
beef supplies and lower prices for finished cattle and calves,
especially with the unfortunate interruption of exports to Asia.
Challenges for the year include the restoration of these exports
as well as drought concerns in the central and southern Plains.
"Beef producers continued to expand the breeding herd for the
second year," said Hurt. "Beef cow numbers increased by 1
percent during 2005, after a small rise in 2004. The total
number of cows increased by 338,000 head, and the increase was
concentrated in the western Corn Belt, where Missouri increased
by 115,000 cows and Iowa by 40,000."
Increases were also noted in the southern and central Plains
states. Oklahoma producers increased by 60,000 head; Texas
increased by 43,000 head; and Colorado, Nebraska and Kansas
increased by 97,000 cows.
Beef cow numbers in the eastern Corn Belt remained stable as
a region as Illinois dropped 14,000 cows, Indiana dropped 8,000
cows, and Ohio increased 3,000 cows.
"For Illinois, current cow numbers are 20,000 larger than
those of three years ago, and Ohio has added 37,000 cows in the
last three years," said Hurt. "Indiana, however, has seen beef
cow numbers decrease."
Hurt said that even more expansion can be expected in 2006.
The number of beef heifers being retained for replacements to go
back into breeding herds was up by nearly 4 percent.
"This rate of retention should allow the beef cow herd to
increase by about 1 percent over the coming year," he said.
[to top of second column] |
 Dairy cow numbers increased by 0.6 percent in response to strong
milk prices in 2005, when the U.S. milk price averaged $15.14 per
hundredweight.
Regionally, the largest increases in total cows were in the
Pacific Northwest, up 41,000; southern Plains, 29,000; the West,
29,000; and the eastern Corn Belt, 19,000.
Changes in individual states in the eastern Corn Belt included
Ohio, up 7,000; Michigan, up 5,000; Wisconsin, up 5,000; Indiana, up
3,000; and Illinois, down 1,000.
"Much like the beef herd, heifer retention for herd replacements
was up 4 percent and will allow an increase in the number of milk
cows by nearly 1 percent this year," said Hurt.
The 2006 calf crop is expected to be larger by about 0.7 percent.
Hurt said that this modest increase means that calves and feeder
cattle will remain in short supply throughout the year.
"Beef supplies last year were up only 0.5 percent, with the head
count down about 1 percent and weights nearly 2 percent greater," he
said. "For 2006, slaughter numbers are expected to be up about 2
percent, with weights 1 to 2 percent higher. This means beef
supplies are expected to rise by about 3.5 percent for the year."
Hurt wondered if cattle prices can maintain the record highs of
2005, when Nebraska-finished steers averaged $87.30 and Oklahoma
City 500-to-550-pound steer calves reached $132 per hundredweight.
"With supplies growing by 3.5 percent this year, the answer
should be 'no,'" he said. "Finished steer prices should average
closer to $85 and steer calf prices around $125. However, one
unresolved question at this point is the Asian market. If the Asian
markets could be reopened by the second quarter of 2006, it is
possible for cattle and calf prices to approach last year's record
levels."
Another factor for the cattle industry to watch closely this year
will be the drought currently in the southern Plains.
"The National Weather Service is calling for intensification in
that area and broadening of the drought into the central Plains and
western Corn Belt by this spring," Hurt said.
[University
of Illinois College of Agricultural, Consumer and Environmental
Sciences news release]
|
