Optimism remains for cattle, beef prices

“It was not that long ago that many cattle market analysts debated and held fast to the notion that live cattle prices would not reach and exceed $170 this spring,” he says. “The market is now trading at $180, and most of those same analysts are smart enough to now be asking the question of just how high is this market going to go.”

Griffith says there is no reason to limit expectations, and although prices wouldn’t seem to have a lot of immediate upside potential left, he does not expect weakness in prices this summer.

“There is no reason to put a limit on price expectations at this point because finished cattle prices have already surpassed what most people thought they would do this spring,” he says. “The continued price run is hard to fathom as prices dance around $180. One would think that upside potential is waning at this point, but it is doubtful there will be much weakness through the summer and fall months either.”

As for beef prices, Griffith says there should be some seasonal support ahead.

“Wholesale beef prices should be supported the next six weeks as many retailers are purchasing for the summer grilling season and the unofficial kickoff to summer that is the Memorial Day weekend,” he says.

Beef prices could have room to keep going up, although at some point higher prices could affect demand.

“There is likely room in the wholesale beef market for prices to continue escalating,” Griffith says. “What will matter the most is how much the consumer has to pay at retail for beef products.”

Optimism remains for cattle prices going forward, after years of national herd liquidation due to widespread drought.

“The run in cash prices coupled with the run in deferred futures demonstrates considerable optimism for cattle,” Griffith says.

“The simple supply dynamics support such price action as does beef demand. It is clear beef supply will be limited for at least two to three years, which supports cattle prices.”