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CattleFax says drought, feed costs need to improve in 2023

The CEO of CattleFax says drought and feed costs could be potential wildcards for cattle producers trying to improve bottom lines in 2023.

Randy Blach tells Brownfield he expects drought conditions and heat intensity to improve. “Both of those things will be more favorable as we get into late spring and summer, and we should be wetter by fall. We still have to navigate drought conditions in 2023 in total, but it will be better than it was in 2022.”

He says the US will need to raise a corn crop of about 15 billion bushels to help reduce input costs. “By fall of next year, we need to see grain prices back into the mid $5 instead of the cost of bunk today.  If we look at corn prices today at $6.60 a bushel, you have to add another $2 a bushel or $2.25 a bushel of what it’s costing at the bunk with the basis we have in most of these areas.”

And, Blach says, basis levels need to soften. “Who would’ve thought that we would have basis levels like this.  It’s not been uncommon that we’ve seen these close out costs to gains in Kansas over the last three months that have been 130 to 140.  That’s the highest on record.”

He says demand for US beef will need to remain strong to help keep prices supported.