Cattlemen experienced a historic price rally this spring, with cash cattle prices climbing $20 over a four week time. Much of that price runup was due to supplies that were well short of expectations with carcass weights down 30 pounds compared to a year ago. Analysts believe it will likely be late 3rd quarter or early 4th quarter before carcass weights begin to increase noticeably.
But the market has also been supported by robust consumer beef demand. Domestic ground beef demand is strong and the summer grilling season is just beginning.
Export demand is also very strong this year, with March export volume up 25%, the largest monthly export volume since 1974.
Despite the strong demand and tighter supplies, the cattle markets should expect a seasonal decline from the spring highs to the summer lows – maybe 10- 15%. The key to this summer’s cash cattle prices will be how strongly retailers feature beef in light of the higher wholesale prices they’ve paid for beef. Retail beef margins have declined, and so will retailers willingness to feature beef over pork and poultry.
Market analysts will watch Memorial Day weekend beef sales for indications of consumer demand and where cattle markets are headed this summer.