News release issued February 12, 2001, effective immediately.
For media inquiries, contact Caroline Booth Lara, Communications Specialist, (580) 224-6379.
  email: cblara@noble.org

Cattle Prices on the Rise

The cattle cycle is alive and well in 2001, with prices for all classes of cattle moving upward over the last three years. This increase in price holds true with the ten-year cyclical nature of the market and closely corresponds with a decline in total cattle inventory.

"What does that mean? Good news!" explained Steve Swigert, an agricultural economist with the Ardmore-based Noble Foundation. "Cow-calf producers should have a banner year. With calf prices in the 105- to 115-dollar-per-hundredweight range for 500- to 550-pound steers, it will be a seller's market for calves, assuming corn is about two dollars per bushel."

With the total cattle inventory at less than 100 million head, cow-calf operations should be profitable during the next two to three years, perhaps even longer.

"This is a time in the cattle cycle for producers to optimize profits by paying close attention to the costs and production of herds. It can also be a time to make a serious analysis of your financial position," Swigert explained. "Should you use profits to pay off debt or put some money aside for when the cattle cycle turns downward? Please remember that heifers retained during the next three years will be at their productive peak in 2005 to 2008 at the other end of the cattle cycle."
Although cow-calf producers are enjoying a few years of profit, the market will provide challenges for stocker operators.

"Their margin will be squeezed by the higher cost of cattle," Swigert said. "Competition will force operators to buy lighter cattle and keep them longer so that the average feeder cattle prices they receive in 2001, 85 to 90 dollars per hundredweight if corn is in the two-dollar range, will provide them a profit. So if you are a stocker operator, this could be a time to consider positioning yourself so that you can buy your replacement cattle at seasonal lows.

"This should be an exciting time for those already in the cattle business," Swigert added. "Consumer demand for beef has improved, and prices are good for the producer. Those considering getting into the cow-calf business need to carefully analyze their investment to determine its return over its life."

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Graphics: Cattle Price Graphs 107k eps

The Samuel Roberts Noble Foundation, headquartered in Ardmore, Okla., is a non-profit organization conducting agricultural, forage biotechnological, and plant biology research; providing grants to numerous non-profit charitable, educational and health organizations; and assisting farmers and ranchers through educational and consultative agricultural programs.

To learn more, check out the Noble Foundation Web site at http://www.noble.org.

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