Fourth Quarter Production Will Increase

Relatively tight beef supplies and strong beef demand combined to support significantly high cattle prices in the third quarter.  However, there is still a large amount of uncertainty surrounding the cattle and beef market going into the fourth quarter.  In particular, questions remain regarding both domestic and international beef demand and the status of U.S. beef exports and cattle imports from Canada.

In the fourth quarter, slower fed cattle marketing rates will result in heavy slaughter cattle weights.  Cattle slaughter is expected to be down around 2 percent compared to last year.  However, heavier slaughter weights will more than likely result in a modest year-to-year increase in fourth quarter U.S. beef production.  Also, U.S. beef imports for the quarter are likely to be above 2003’s while beef exports continue to be small.

Fed cattle prices have begun to weaken and are expected to average $85 to $87 per cwt. for the fourth quarter, well below last year’s record.  Despite a modest seasonal decline, yearling and calf prices will remain relatively strong in the fourth quarter and may be $5 to $10 per cwt. above 2003’s.

Relatively tight beef supplies and strong beef demand combined to support significantly high cattle prices in the third quarter.   Overall, 2004 will be remembered for record high U.S. cattle prices.

Source:  Livestock Marketing Information