Prices for cattle strengthened in 2023 and more increases could be in the future. Recent prices for 500-600 lb. feeder steers in Nebraska were around $305 per cwt. compared to $220 a year ago. And while prices for live steers are off highs of a few months ago, recent sales at $174 per cwt. are higher compared to $156/cwt. at this time last year. The USDA WASDE projects lower beef production this year, projected down over 1 billion pounds. Meanwhile, domestic demand for beef is resilient. Kansas State University’s choice beef monthly demand index for October was higher compared to January 2023—a sign consumer demand is still steady. Beef exports, though, were lower in 2023 and are projected to fall even further in 2024.
The USDA projects the price of fed steers to remain steady through 2024. However, Dennis Smith, a market observer writing in Beef magazine, argues prices will be sharply higher by the end of the year as packers bid aggressively for fewer animals. Whatever the case, the potential for positive returns in the cow/calf sector is good. Moderating expenses and higher prices for feeder cattle should provide opportunities for profits. Prospects for cattle feeders are not as good. Glen Tonsor, agricultural economist with Kansas State University, expects negative returns for cattle feeding for the year.