The LMIC is forecasting that calf (500-to 600-pound steer) prices in the Southern Plains will average above 2016’s depressed quarterly average this fall (October-December). Does that mean calf prices in 2018 and 2019 will continue to post year-over-year increases? The answer is no, at least producers should not be basing their financial plans on such.
Both supply and demand dimensions will determine prices. The fundamentals of the cattle and beef supply for the next two years will be the size of the U.S. calf crops. As reported by USDA-NASS, the size U.S. calf crops have increased each of the last three years and in 2017 looks to be the largest since 2008. Based on the cowherd, both the 2018 and 2019 calf crops are expected to be even bigger, all else equal that is a challenging environment to keep raising prices.