Saturday, February 17, 2007
Long-Run 400-500 Lb Calf Prices
I thought I would share a set of long-run steer calf prices that I generated recently. Over the years, I have used this slide to present the beef price cycles that have occurred since the early 1970s. I recommend that you go to the 3rd slide first, the middle slide second, and the top slide last.
The top slide presents an analysis of the "U" or "V" shaped beef price cycle of the last several cattle cycles. the key point here is to recognize that beef price cycle tend to go in either a "U" share curve or a "V" shaped curve. This suggests that the current beef price cycle (2005 through 2015) will also be either "U" or "v" shaped. I am unable to predict which it will be. The key point, however, is that I am predicting a downturn in calf prices for the rest of this decade.
The second slide presents the statistical trend line for these prices. I actually had never calculated this line before. What struck me the most, was how calf prices have generally trended upward with the beef price cycles quite clear above and below the trend line.
I argue that ranchers need to know if current prices are above or below the trend line. When current prices are above the trend line, it signals the good times for beef cow producers and when current prices are below the price line, it signals tough times for beef cow producers.
You can print the two charts by first double clicking on the figure and a larger version will load into your computer. Then, use your browser's print command to print the figure.