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Tonsor: Beef cattle outlook supports higher prices

Glynn Tonsor tells Kansas State University Stocker Field Day that tight supplies support higher prices for next two years.

Jennifer M. Latzke, Editor

October 10, 2023

3 Min Read
Presenter in front of audience in folding chairs
BEEF OUTLOOK: Glynn Tonsor, K-State agricultural economics assistant professor, presents his beef cattle outlook at the 2023 Kansas State University Beef Stocker Field Day, Sept. 28, at the K-State beef stocker unit, Manhattan, Kan. Jennifer M. Latzke

Glynn Tonsor told attendees at the Kansas State University Beef Stocker Field Day Sept. 28 if they take away two points from his beef outlook, to let them be these:

  1. We have notably higher cattle prices now, and we’re expecting to sustain those through 2025 at least.

  2. Beef demand has held up better than we thought it would in 2023, and it’s been really good for at least the past couple of years.

Fewer animals

Tonsor, K-State agricultural economics assistant professor, explained the extended drought in cow-calf country has led to fewer beef cattle in our nation’s herd. Smaller calf crops in the past pretty much dictate lower slaughter numbers —and we’re on path, he says, for lower fed cattle slaughter over the next nine quarters.

“Here in 2023, we’re going to harvest 5.5% fewer, mainly steers and heifers, fewer than we did in 2022,” Tonsor said. “We’re going to further reduce that by 7.5% in 2024, and we’re going to reduce it even further in 2025 by 5.5%.”

It’s not just the number of fed cattle, but the weight they bring to the packer. Tonsor says projections are a 1% increase in dressed weights through 2024 and into 2025. Consider: Lower cattle numbers going into feedlots means feeders need to meet their margins, so expect some movement in feed costs and the days cattle are on feed, Tonsor said.

And still, that 1% to maybe 1.5% bump in dressed weights isn’t enough to overcome the lower cattle numbers, and the U.S. in 2023 saw a 6% decline in pounds of beef produced — with 2024 projected to grow that deficit another 6% and 2025 to add to that deficit by another 4.5%. That’s the core support of these projected higher cattle prices, Tonsor said.

The Livestock Marketing Information Center projects that the 500- to 600-pound feeder steer price out of the Southern Plains for the last quarter of 2023, will be in the range of $2.85 to $2.87 per cwt. There is a strong likelihood that cattle producers may see some calves sold for $3 in the next month, Tonsor said, and that could go as high as $3.25 to $3.40 in the last quarter of 2025. That’s something for cow-calf producers to look forward to, but stockers and backgrounders will need to account for in their business plans.

Better cattle

Tonsor said even though the beef cattle herd is down 3.6% to around 28.9 million head from 2022, today’s cattle are much improved over the cattle of 20 years ago. Advancements in gathering data to help cattle producers make better decisions, and the increased efficiency in feeding out cattle and reducing death losses in the feedlots are all ways the industry has evolved.

Mother Nature, though, can’t be counted out. Tonsor reminded cattle producers that roughly one-third of the nation’s beef cattle herd is in states where conditions have improved from the drought. In the big picture, though, there are fewer cows grazing on land under drought stress. The herd, Tonsor said, is in a better forage position than it was last year.

Cattle producers may be looking to talk to their lenders about expanding their herd, and he advised them to use the tool that you can find online at Evaluating Cattle Cycles: Changes over Time and Implications.

Users can input the price they expect to pay for replacement cows, and other data, and it will tell them what kind of return they may expect. Tonsor strongly advised cattle producers to know their costs of production, and to use this tool before they start expanding their herds.

You can see Tonsor's slides here. Also, be sure to check back with the K-State Beef Stocker Field Day website for recordings of speakers that you might have missed.

About the Author(s)

Jennifer M. Latzke

Editor, Kansas Farmer

Through all her travels, Jennifer M. Latzke knows that there is no place like Kansas.

Jennifer grew up on her family’s multigenerational registered Angus seedstock ranch and diversified farm just north of Woodbine, Kan., about 30 minutes south of Junction City on the edge of the Kansas Flint Hills. Rock Springs Ranch State 4-H Center was in her family’s backyard.

While at Kansas State University, Jennifer was a member of the Sigma Kappa Sorority and a national officer for the Agricultural Communicators of Tomorrow. She graduated in May 2000 with a bachelor’s degree in agricultural communications and a minor in animal science. In August 2000 Jennifer started her 20-year agricultural writing career in Dodge City, Kan., on the far southwest corner of the state.

She’s traveled across the U.S. writing on wheat, sorghum, corn, cotton, dairy and beef stories as well as breaking news and policy at the local, state and national levels. Latzke has traveled across Mexico and South America with the U.S. Wheat Associates and toured Vietnam as a member of KARL Class X. She’s traveled to Argentina as one of 10 IFAJ-Alltech Young Leaders in Agricultural Journalism. And she was part of a delegation of AAEA: The Ag Communicators Network members invited to Cuba.

Jennifer’s an award-winning writer, columnist, and podcaster, recognized by the Kansas Professional Communicators, Kansas Press Association, the National Federation of Presswomen, Livestock Publications Council, and AAEA. In 2019, Jennifer reached the pinnacle of achievements, earning the title of “Writer of Merit” from AAEA.

Trips and accolades are lovely, but Jennifer says she is happiest on the road talking to farmers and ranchers and gathering stories and photos to share with readers.

“It’s an honor and a great responsibility to be able to tell someone’s story and bring them recognition for their work on the land,” Jennifer says. “But my role is also evolving to help our more urban neighbors understand the issues our Kansas farmers face in bringing the food and fiber to their store shelves.”

She spends her time gardening, crafting, watching K-State football, and cheering on her nephews and niece in their 4-H projects. She can be found on Twitter at @Latzke.

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