The Texas Cattle Feeder’s Association represents feedlots in Texas, Oklahoma, and New Mexico, and recently held their annual meeting. Senior Farm and Ranch Broadcaster Ron Hays is featuring comments from Mike Murphy with the CattleFax Organization about several topics including heifer retention. Murphy was a speaker at the TCFA meeting in San Antonio. This is the second in a two-part series with Mike Murphy. The first can be found here.
According to Murphy, this fall is the second year in a row for big financial margins at the cow calf level, which he believes will lead to the retention of roughly 450,000 more heifers that will become mama cows in the next couple of years.
“We are finally seeing that turn, but it did take two years of back-to-back big margins for the cow calf sector to go ahead and keep those heifers back and have the confidence that this market is sustainable as they start to build for the end of the decade,” Murphy said.
Murphy is optimistic about 2025. He believes that it could be another record-setting year. He expects fed cattle to average $192 for the year, with a plus or minus $12 range. He predicts feeder cattle to be at a practical range of $2.30 to $2.70. Calves, in the early spring, on a U.S. averages basis for a 550 lb steer, should get to $3.30 to $3.40 per hundredweight; while he still expects the seasonal pullback in summer and fall, so long as there isn’t a major drought event, he says that $2.95 to $3.00 in the fall should be reasonable support to the calf market.
Strong beef demand is a requirement in the equation to produce a good cattle market, but Murphy isn’t concerned about that. “We’ve improved the quality of the product over the last ten to fifteen years. From a quality grade perspective, that is tied back to the value of the product and the consumer’s willingness to spend more money for a higher quality product. We all get a little bit nervous because demand is so strong and our prices are extremely high, as long as we have a stable economy, we feel like the demand is very sustainable.”
Beef is at record-high prices relative to pork and poultry at the retail level which he knows is a cause for concern. In the face of an economic slowdown, it would be easy for consumers to purchase a cheaper protein option. “That being said, pork and poultry production, as we look into 2025, won’t experience any significant increases, so that allows us to see where they will be able to raise their prices a little bit to keep up with what we are doing on the beef side,” Murphy explained.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR at the top of the story for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
