DUBUQUE, Iowa — When attendees of the Driftless Region Beef Conference met for the final day of the event on Jan. 25, the federal government was still shut down. Beef producers were still waiting on a number of reports from the U.S. Department of Agriculture — reports used as a starting place for analysis and for making long-term investment and management decisions on their operations.

“The continued loss of the USDA reports will be weighing heavily on the market,” said Brenda Boetel, professor and Extension commodity marketing specialist at UW-River Falls.

As of Jan. 25, farmers had missed the World Agricultural Supply and Demand Estimates report, which estimates the size of crops in 2018 and details information on winter wheat seedlings and Dec. 1 corn stocks estimates; and the Livestock Slaughter and Cattle on Feed reports, which are big for beef producers. At the time of her presentation at the conference, Boetel was unsure the Jan. 31 cattle numbers would be available from the USDA, an important semi-annual report that compiles herd size data. Export data hadn’t been updated since the government shutdown either at that point in time.

“The longer it goes on, the more challenging it gets because we don’t have accurate data,” she said.

As 2019 kicks off, a number of other factors will also be influencing the beef market this year, including world and U.S. economics, meat demand domestically and internationally, exports and trade policy, a new Congress, African Swine Fever found in China and crop supplies from last year, she predicted.

U.S. demand for corn is up slightly, due to increased feed and residual and exports. However, corn prices remained low due to large production with corn stocks remaining lower than last year as well. But Boetel suggested that corn acreage will be up in 2019 as current market prices favor corn production.

“Corn prices will likely follow the typical seasonal pattern and trade up until the end of April,” she added.

U.S demand for meat “has been strong — a saving grace as we are producing a lot of meat,” Boetel said. Exports have been offsetting weaker domestic demand, with strong wholesale beef prices still indicating a strong consumer demand.

Boetel said she believes fast food establishments will be OK in 2019; however, restaurants could start taking hits, forcing them to put less expensive meat products on their menus.

U.S. beef cow inventories will be higher in 2019, with an estimated 32 million head as indicated by female slaughter and retention rates. Heifer slaughter, at just under 36 percent of fed cattle slaughter, and cow cull rates of nearly 10 percent, also indicate that the beef cow herd will stabilize in 2019.

Beef production will likely increase by almost 2 percent in 2019 to 27.4 billion pounds, with an additional growth of 1 percent projected for 2020. This will continue the U.S.’s reliance on exports to absorb additional supplies. And although 2019 will see continued beef production growth, the rate of growth has slowed since 2016.

U.S. consumption of beef per capita will be at 57.1 pounds, up 0.3 percent over 2018. Imports of beef will likely be lower in 2019 due to increased U.S. cow slaughter and moderated Australian beef production.

In the world of trade, Boetel predicted beef exports to slowly continue to increase, although world economic growth is expected to be lower in 2019. This may impact beef exports due to the high-priced/higher-value nature of U.S. beef. An uncertain global trade situation will also continue to slow world growth and impact U.S. exports.

“The economic forecast for the U.S. is looking dimmer, with many analysts predicting a recession,” Boetel said.

Not only is a recession concerning for the national economy, a recession has the potential to disrupt beef demand and bring lower prices. But barring any loss of exports or recession, Boetel expects fat cattle prices to be stable to down slightly in 2019, with feeder cattle and calf prices expected to experience the greatest decline in prices, especially in the fall when the larger calf crop goes to market.

Boetel forecasted continued expansion in all three major proteins (poultry, pork and beef) in 2019, with a record protein production of 102.5 billion pounds expected. She added that she predicts commercial slaughter will be up by 1 percent in 2019.

She also recommended farmers put extra focus on measuring and managing input costs as profit margins are predicted to decline for producers throughout the year, shifting larger margins to processors. With an increased reliance on global trade, volatility has heightened and forced farmers to find ways to protect their personal equity and manage risk.

“2019 will force producers to examine the core values of operating a business,” Boetel said. “Poorer margins are likely, however the efficient producer who maximizes production while managing costs has some opportunity for small profits in 2019.”