eteran market analyst Kevin Good just gave America’s cow-calf producers the green light for higher prices, looking all the way into 2025. It’s old-fashioned supply and demand at work, with consumer demand, export demand and increased processing capacity all expected to play key roles in just how high prices go. Good, who started working with CattleFax in 1982 and today is vice president of industry relations for the organization, covers the fed cattle markets and analyzes supply and demand, production trends, weather and other factors that affect the cattle and commodity business. He presented his most recent market overview as part of a virtual media roundtable, sponsored by Zoetis. The analyst’s outlook for the cow-calf sector highlighted seven factors that all appear to line up in favor of producers moving forward.
Leverage is going to shift. There have been plenty of complaints about packers having all the market leverage, especially last year. That’s all changing as things swing back in favor of producers. Leverage, noted Good, is that 40-hour plant capacity and the number of cattle harvested weekly. The last four to five years as supply increased, it outran capacity, and demand was not strong enough to counter that. Moving forward, though, supplies of cattle will continue to decline, and at the same time, existing processing plants are expanding, and new ones are being built. This expanded demand means the leverage component shifts away from packers, with more dollars moving into the hands of cattle producers.