Cattle feedlots have the highest December inventories in at least 10 years. Placement of cattle into feedlots in November was 12% ahead of last year, although marketing was down slightly, meaning a lot of cattle entering the market next spring and summer.
According to USDA livestock analyst Shayle Shagam that will depress prices some, but not too much; maybe a dollar off the 2007 average.
"There's continued strong demand out there, we expect to see exports continue to build which will help absorb some of the supply on the market," Shagam says. "Part of it also reflects that even with that large lump coming out, we're still talking about beef production in the course of the year that will probably be averaging a bit lower than this year."
Shagam says cattle prices may hover around the $90 a hundredweight range for most of 2008.