Invest In Production Land: Cattle Prices Getting Stronger
Written by Jerry Hicks, Ranch Broker, and Scott Hawes, Principal Broker, Oregon
Industry experts anticipate improved cattle prices for 2020. It is believed that the US beef cattle herd expansion that began five years ago has run its course and is entering into a liquidation phase. While it is anticipated that 2020 will see record beef production, the continuation of the longest US economic expansion in history continues to support domestic beef demand.
The effects of the African Swine Fever’s decimation of the Chinese hog herd are beginning to increase Chinese demand for US beef. Further support for the US beef export demand is expected from the global protein shortage, new trade agreements with Japan and EU, and President Trump’s signing of the United States-Mexico-Canada Agreement, which still needs to be ratified by Canada. If a trade agreement with China can come to fruition, even greater export demand can be anticipated. 2019 US dairy cow and beef cow slaughter was very large and is anticipated to be significantly lower in 2020, adding further support for US beef prices. Corn and soybean acres are expected to regain acres lost due to the 2019 wet Spring and with normal yields, corn prices should decline.
Key variables for improved 2020 beef cattle prices yet hinge on the possibility of drought, the US corn, soybean and hay crops and the return to profitability for the feeding sector. It’s amazing to see how much the markets change on a 2-4% inventory move. Demand or perceived demand usually creates an upward move in market values. It does seem that the stars are in alignment for a better market just ahead.
Connect with Jerry Hicks
Born and raised in Central Oregon, Jerry has specialized in the sale of large farms and ranches throughout Oregon since 2000. He has the great fortune of being well connected with the land and locals of Eastern and Central Oregon, helping to create a successful legacy of brokering the finest agricultural and recreational properties.
Connect with Scott Hawes
Having lived throughout Oregon, Scott brings his customers over forty years of experience in mortgage and commercial lending, real estate appraisal, and more than thirty-five years of experience in real estate brokerage services. Although Scott has handled varied business, commercial and residential transactions, and relationships, both as a lender and as a real estate broker, his primary focus has been on agricultural real estate. Having serviced the agricultural portfolios for several of Oregon’s banks, Scott is familiar with most agricultural enterprises common to Eastern Oregon, Eastern Washington, Southwest Idaho, Northern California, and Nevada and is working with Fay Ranches, Inc. to expand its market presence into Arizona.
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