Cattlemen should expect higher average prices for all classes of cattle during 2003, according to Cattle-Fax. Tighter fed cattle supplies and smaller total beef production will drive much of the increase. Cattle feeders and stocker operations are expected to post solid profits during the first half of 2003. This will begin to replace some of the equity lost during 2002 and will undermind demand and prices for feeder cattle and calves.

Cattle feeders lost between $35 and $40 per head on average during 2002. This loss of equity will limit price increases for feeder cattle and calves through the first half of the year as margin operators are likely to be more disciplined in their purchasing decisions.

Cattle feeders, stocker operators, backgrounders, and cow-calf producers should all experience more consistent and positive profit margins during 2003. Market cow and breeding cattle prices should be higher in 2003. The latter will depend to a large degree on range and pasture conditions. The current drought conditions throughout much of the West and Northern Plains may have a greater impact on prices during 2003 than during 2002.

Beef demand is expected to improve slightly during 2003 compared to 2002. It isn't expected to exceed the record demand of 2001, but the improvement should support prices for beef and all classes of cattle. ©