Last week the cattle and beef markets were holding their breaths before the Thanksgiving week. Cash cattle trade didn’t relevantly develop until Friday and futures were sideways. But prices for feeder cattle keep going up and the cutout continues its slow march upwards.
Last Monday, the November World Agricultural Supply and Demand Estimates (WASDE) report was released. Most noteworthy was the one-month reversal of corn yield rates, even as analysts still call for higher yield estimates.
The cash trade was slow to develop last week as packers were stretching what they had in committed cattle to cover reduced production needs. Increases in the futures also had them holding off buying in hopes of a downturn as cattle feeders were asking for higher money.
Activity in the cattle and beef markets was slow last week as the nation turned its attention to the elections and the strength in the outside markets. Live and feeder cattle futures were quietly mixed as more attention-grabbing markets—the Dow and the S&P 500— set record highs.
For many producers, this may be a question of expanding the cow herd. In addition to potential herd expansion, producers should consider whether current market values should prompt management changes as well. Consider this question, for example: What is the optimal level of death loss for cows or calves?.
Although margins are often tight in the stocker business, the higher dollar risk of recent years points to a need to think beyond buying low and light and selling high and heavy. Seasoned stockers like Mark Yazel, who operates along the border from Kiowa, KS, to northeastern Oklahoma, know there is more to it than weight.
Prior to Election Day, Senator Rand Paul, a potential Republican Presidential candidate, gave a foreign policy address at the Center for the National Interest dinner in New York City. He was the recipient of the 2014 Distinguished Service Award, and offered some compelling arguments for the Trans-Pacific Partnership (TPP).
Meat Export Federation (USMEF) hosted a press conference with representatives and leaders from various regions worldwide. Topics included what has gone on so far this year in U.S. meat trade, where it has seen success, where it still faces challenges, and where there are some opportunities.
By close of trade Thursday, slightly more than 9,000 head had been confirmed sold. Average live prices for steers were $167.50 and $263 dressed. Though light for a total-week sale, that likely set the tone for whatever cleanup trade that happened Friday.
With lower prices, those incentives just aren’t there, for either acres or intensive inputs to push production,” Welch said. “On the demand side, we are still seeing strong export demand and good feed and fuel use. High meat prices offer rewards to increase livestock numbers and feed to heavier weights; that will require more grain used for feed.
China’s rapid economic growth and changing population demographics have affected the world’s most populous country. Driven by income growth, urbanization and a transition to a market economy, the Chinese diet has shifted from its usual staples to meat.
The most recent Cattle on Feed report, released Friday, Oct. 24, was called roundly neutral for its lack of divergence from the past year, and for falling in line with prereport estimates. There was one additional slaughter day in September 2014 compared to 2013.
About 150,000 participants from more than 100 countries are in attendance at the five-day event. A majority of those attending are from the European Union, but SIAL also attracts a large number of buyers and other food industry professionals from Russia, the Middle East and many Asian countries including Japan and China.
The industry seems to be running a manic two-part market game. On the one hand, strength in the cash fed and feeder markets was striking last week, as were gains in both futures markets, yet at the same time there was continued information on declining and disappointing beef movement.
A recent report from Rabobank suggests the future of beef abroad will be Brazil. However, the country—already the world’s second largest beef producer and largest exporter—is not nearly as efficient as its fellow beef competitors. The answer will be American-style feedlots, fueled by the growing Brazilian grain industry.
Most things were up in the most recent World Agricultural Supply and Demand Estimates (WASDE) report, released in the afternoon on Oct. 10. For beef, the increased production estimated hinged mostly on increased carcass weights, but corn and soybean yield estimates were finally catching up with what analysts have been saying for months.
Unlike past weeks, trade got underway earlier than usual last week. By Wednesday, over 50,000 head had been confirmed sold with Kansas, Nebraska, and the western Corn Belt leading the charge, despite analysts’ early week projections of late week trade.
The formula is pretty simple. Winter wheat planting in Oklahoma this fall is ahead of normal pace and the best in several years. All that is lacking in many cases is a rain to get the wheat up or connect surface moisture with subsoil moisture and keep the wheat growing.
Plummeting gasoline prices are the result of lagging economic growth in many parts of the world, the end of the summer driving season, less expensive winter gasoline and well-functioning Midwest refineries, Purdue University Energy Economist Wally Tyner says.