As goes the corn market, so will go the fed-cattle market in 1998, says Jim Gill, Texas Cattle Feeders Association market director. Assuming normal weather, Gill thinks the 1998 corn harvest will be 9.3-9.6 billion bushels, providing continued price stability. In addition, exports will continue to play a crucial role in prices and the instability in the Far East and Pacific Rim markets will likely have a major impact on final prices to feedyards, he says.
"Beef production in 1998 will be near 24.4 billion pounds, five percent below the 25.6 billion pounds in 1997," he predicts. "This will be the first year to show a decrease in beef production since 1993 and will put annual consumption near 64 lbs. on a retail weight basis.
"Pork and poultry will continue to offer stiff competition to beef prices. Pork production in 1998 is expected to be near 18.2 billion pounds, up seven percent from the 17.1 billion pounds in 1997. Poultry production is expected to increase another three percent to 34.3 billion pounds, compared with 33 billion pounds in 1997," Gill says.
What does this mean for prices? "Feeder cattle prices, which averaged near $78 during 1997, will likely remain about steady during the first half of 1998 before moving higher, into the low $80s during the latter part of 1998," Gill says. "His outlook for fed-cattle prices, by quarters: * First quarter - $65-67
* Second quarter - $62-67
* Third quarter - $64-69
* Fourth quarter - $68-73