After heavy losses in 2016, the cattle market received a ‘pleasant surprise’ in 2017, according to Derrell Peel, Breedlove professor of Agribusiness and Extension Livestock Marketing specialist, Oklahoma State University.
“We’ve seen, by and large, stronger than expected prices much of the year. And certainly here at the end of the year, compared to the awful lows that we had a year ago at this time, we’re running well above that across the board for feeder cattle all the way up to fed cattle,” he says. “So, we see prices stronger than expected as we round out the year.”
Stocker and feeder operator Diane Heitschmidt of R&D Cattle, Nazareth, Texas, is relieved for the “pretty decent recovery” in 2017. “It has been a very good year for us. Last year was the bloodbath in the cattle business, like we have never seen before,” says Heitschmidt, who began running cattle with her father in the 1980s. “There were cattle coming out of the feed yard losing $500 to $750 a head. It was just horrendous. Thankfully, prior to that, in 2014, we had really good profits—cattle making $500 to $600 per head. And then we had the bad break in 2015/2016 and that’s where the huge losses took place.
Butch Hufnagel and his daughter Diane Heitschmidt with their stocker cattle near Nazareth, Texas.
“I don’t think most people have recovered over the loss of 2015/2016. But it has been a very good year.”
Peel attributes the upswing to demand. “Certainly, the supply-side pressures continue in 2017,” he says. “We’re still in herd expansion, which has implications even out a couple of years beyond this. But we’ve got a bigger calf crop on the ground right now in 2017 and bigger feed supplies from last year.