Strong Cattle Markets in 2006

CHICAGO - Jan 31/06 - SNS -- Cattle markets should experience another year of high prices and cow calf producers will be well rewarded with very profitable calf prices, which are likely to continue to fan the desires for greater expansion, believes Chris Hurt, Extension Economist, Purdue University.

"The current expansion is expected to extend until around 2010 with the largest beef production on this cycle coming in 2010 to 2012. This likely means several more years of favorable prices as cow slaughter remains low and heifer retention high."

Hurt cautioned, however, that larger beef and dairy herds mean growing beef supplies and lower prices for finished cattle and calves, especially with the unfortunate interruption of exports to Asia. "Challenges for the year include the restoration of these exports as well as drought concerns in the Central and Southern Plains. . . .

"Another factor for the cattle industry to watch closely this year will be the drought currently in the Southern Plains. The National Weather Service is calling for intensification in that area and a broadening of the drought into the Central Plains and Western Corn Belt by this spring."

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