WEST LAFAYETTE, Ind. — Cattle prices have started to
moderate after reaching unexplained record highs in the first four months of the
year, said Purdue Extension agricultural economist Chris Hurt.
He believes that the highest prices of the year are now
likely in the past.
In the first quarter of 2014, Nebraska steers sold at an
average price of $147 per live hundredweight — more than $20 higher than the
previous first-quarter record price.
Nationally, finished cattle prices were up 17 percent during
the first quarter. With production only down 4 percent, the hike has been
“It was not so surprising to have record-high cattle prices,
but the real surprise was the lofty heights of those new records,” Hurt
While there are a few factors that could have played into
higher prices, Hurt said none of them seem to have been big enough to force
prices to the levels they reached.
Some of those include overall low meat and poultry supplies,
reduced beef production, low broiler egg hatchability and expected reduction in
pork availability from the porcine epidemic diarrhea virus.
“PEDV in hogs may have been the real kicker, primarily
because the pork market appears to have sharply overshot prices due to the
uncertainty of the actual death loss from the disease,” Hurt said. “Much like
pork, we are left with an incomplete understanding of why cattle prices were so
high, especially in March and April.
“Like in the pork sector, this may mean that cattle prices
were caught up in the fear of very short meat and poultry supplies and may have
The high cattle prices translated to higher retail beef
prices for consumers. The per-pound retail beef price average hit a record $5.55
in the first quarter of 2014 and is expected to be $5.67 for all of 2014. That’s
a 7 percent increase over the 2013 average of $5.29 per pound.
Live cattle prices have started to come down a bit, however,
and Hurt said the moderation should continue. Finished cattle prices are
expected to move to the mid to low $140s per live hundredweight in May and June,
range between $135 and $139 in the third quarter, then bounce back to the low-
to mid- $140s for the last quarter.
The average price per live hundredweight last year of $126
is expected to be near $142 for 2014.
Higher cattle prices ultimately could lead producers to
consider growing their operations, Hurt said.
“Unexplained high prices in the first four months of 2014
have added new excitement for cattle producers as they see strong profitability
potential for the first time in years,” he said. “This means that the conditions
have become positive for some beef cow producers to move toward
Reduced female slaughter and fewer heifers placed in
feedlots suggest expansion already might have started. Heifers slaughtered were
down 7 percent in the first quarter of 2014, while cow slaughter numbers were
down 8 percent.
“The reduced female slaughter alone accounted for 2 percent
fewer animals in the total slaughter mix,” Hurt said.
According to the U.S. Department of Agriculture’s most
recent quarterly Cattle on Feed Report, the number of heifers in feedlots was
down 6 percent as of April 1, while the number of steers in feedlots was up 3
But a growing national herd won’t offer immediate relief to
consumers worried about retail beef prices, Hurt said.
“The expansion of the beef herd is just beginning and will
likely extend for multiple years,” he said. “This means small supplies and
strong prices of beef in 2015 and 2016.”