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CattleFax Forecasts Positive Profitability Trends in 2022

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(HOUSTON/Feb. 2, 2022) — The popular CattleFax Outlook Seminar, held as part of the 2022 Cattle Industry Convention and NCBA Trade Show in Houston, shared expert market and weather analysis on Wednesday. Cattle price and profitability trends for producers are trending upward. While issues around labor and packing capacity have lingered, both are expected to improve in the year ahead. These expansions in capacity combined with strong global and domestic consumer beef demand suggests increased profitability across segments, signaling a market that is healthier and more stable in the year ahead, according to CattleFax.

Kevin Good, vice president of industry relations and analysis at CattleFax, reported that U.S. beef cow inventories have fallen more than 700,000 head from last year and are off nearly 1.6 million from cycle highs. This year, the beef cowherd will near 30.1 million head.

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“Drought, market volatility and processing capacity challenges affected 30% to 40% of the cowherd over the last year. Without an improvement in weather and profitability, at least 250,000 more head will be liquidated in 2022,” Good said.

The feeder cattle and calf supply will be 675,000 head smaller than last year, totaling 25.5 million head. Fed cattle slaughter will decline 400,000 head lower compared to last year’s total of 25.7 million head. Commercial beef production will contract over the next several years starting with a 2% decline in 2022.

Consumer demand for beef at home and around the globe remained strong in 2021, a trend that will continue in 2022, especially as tight global protein supplies are expected to fuel U.S. export growth. This will also drive beef prices from end-users to consumers to continue higher in the coming years.

About the Author

Clint Thompson

Multimedia Journalist for AgNet Media Inc.