Ag News

Economist predicts “modestly stronger prices” in cattle markets

IARN — “COVID-19 was the underlying driver of a lot of the disruption we saw throughout 2020,” shares Michael Nepvuex, American Farm Bureau Federation economist. Nepvuex offered remarks on the cattle market during a breakout session at the Federation’s annual convention.

Nepvuex relays frustration as, “2020, in terms of livestock and animal protein, was shaping up to be a decent year.” Economists anticipated increased production of red meat and poultry. However, a pandemic quickly derailed some of those predictions.

United State cattle producers will face similar challenges in 2021. Derrell Peel, Oklahoma State University agricultural economist, expects the first half of 2021 to be “a continuation of what we were dealing with in 2020, from the pandemic standpoint.”

“That means, among other things, we continue to see limitations in the food service sector. That’s half, or more of our market that is substantially restricted. We’re still putting a lot of emphasis on the retail/grocery sector to compensate for that. Some of the product challenges that go with that will continue as we go forward,” Peel says.

Peel says, “The good thing is, to a large extent, cattle and beef markets ended on a positive note. We’re starting with a bit of momentum in these markets going forward.” The Livestock Marketing Information Center’s price forecast anticipates “modestly stronger prices, across the board, in 2021.”

“I would put them in the range of five- to nine-percent. There’s a chance that we could do even better than that, particularly in the second half of the year, and could see this thing finish 2021 significantly stronger,” Peel says.

Story courtesy of the Iowa Agribusiness Radio Network