As we begin the new year, Oklahoma State University Extension Livestock Marketing Specialist Dr. Derrell Peel provides his outlook for the year ahead. He said if you look at where we have been in 2014, that is a pretty good barometer of what will be happening in the cattle market for 2015.
"I think by in large it is the same set of factors we have been watching this year," Peel said. "To some extent, I think it is more of the same tendencies from a supply standpoint. We will see reduced slaughter, we will see reduced beef production as a result of that, even with some likely increase in carcass weights on average in 2015."
Peel looks for more supply pressure as feeder calf supplies continue to tighten. He is predicting prices across the board will average higher in 2015. That includes feeder cattle, fed cattle and beef prices at the wholesale and retail levels, but he doesn't think the industry will see a large price increase through the year, like 2014. Peel forecasts we will maintain these levels and push them a little higher at times through the year. As a result prices will average higher for 2015.
One of the factors that may determine how much higher beef and cattle prices may go will be determined by how many females are held back. Peel believes herd rebuilding is taking place, but how quickly is still unknown.
"Certainly there is a lot of incentive and I think a lot of response to that incentive on the part of producers to save heifers ," Peel said. "I have heard some people worry that we could have a quote 'glut of replacement heifers' available next year. I really don't think that is warranted, I think as fast as we can do it, we haven't done this in a long time and I think there will be a lot of replacement heifers, but I think that's really the normal expectation for the beginnings still of expansion that we're in."
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