Rabobank’s RaboResearch released its report titled North American Agribusiness Review for the industry, stating the U.S. economy, while in a “mechanical rebound,” faces headwinds that could pose a threat in the fourth quarter.
Rabobank offered a mixed assessment of the cattle market. While the report expects total beef production to close 0.5 percent above 2019 levels, consumer demand uncertainty could affect fed cattle prices.
Rabobank expects calf prices to stay on trend due to the prospect of a lack of winter grazing due to the drought and limited bunk space.
“However, the prospects of reduced fed cattle supplies by mid-2021 will likely push late-year 550-pound calf prices back above $160/cwt,” the report states. Finally, for cattle, the report states there is a risk of culled cattle prices falling below $160/cwt.
The report also states distiller’s dried grains with solubles (DDGS) could make its way back into rations as the price of corn and soybean meal prices increases.
