Cash fed trade last week was riding the strong price tailwind from the prior week. On Friday, Dec. 27, cash cattle prices increased sharply with cattle selling $3-4 higher for live at $133-136 and $3-6 higher with $210-215—mostly $212-214—for dressed.
The cash fed trade was choppy last week, given the Christmas holiday being smack dab in the middle of the trading week. Analysts expected cattle to sell steady to $1-2 higher than the prior week’s $129-130 live and $205-209 dressed in late-week trade.
In what has been called “moderately bullish,” the most recent Cattle on Feed report showed on-feed, placements, and marketing numbers below industry expectations. The decline in placements of cattle into feedlots with a 1,000-head-or-greater capacity was especially surprising and friendly to the markets.
The Rabobank Global Cattle Price Index has risen 6 percent since June, driven by lower-than-expected beef supply in the main exporting countries and strong Asian demand, according to a new report from the Rabobank Food & Agribusiness (FAR) Research and Advisory group.
“My discussions with Premier Li Keqiang and other Chinese leaders laid the groundwork for future cooperation related to our shared interests in food security, food safety, and sustainability, as well as the expansion of export opportunities for Ameri can farmers and ranchers,” Vilsack said.
Taiwan’s love for American beef is evident by the growth in exports to the Asian island nation this year, and U.S. Meat Export Federation’s (USMEF) Taiwan team, contractor to the Beef Checkoff Program, is exploring new channels to sustain that progress.
Packers were reluctant to pay much for fed cattle last week ahead of projections of decidedly short production weeks. With estimates for this week’s production rates ranging widely between 435,000- 480,000 head, and predictions for next week’s standing at 505,000- 545,000 head, packers felt no pressure to collect cattle around them.
This past week, Sen. Dianne Feinstein (D-CA) and 12 of her Senate colleagues sent a letter to Korean Ambassador Ahn Ho-Young expressing concern that the Korean market may close to organic exports on Jan. 1, 2014.
Cattle markets are heading into the final holiday period of 2013 at record or near record price levels across the board. Cattle slaughter and beef production are falling as the market transitions into a much tighter supply situation in 2014. Cattle and beef prices are expected to push to even higher record levels in 2014.
The December World Agricultural Supply and Demand Estimates (WASDE) report was released with little fanfare last Tuesday. Though there were some exciting production estimate moves for beef, industry eyes were on corn and soybeans, which held few surprises.
Trade was again shrugged off until Friday last week as only 2,844 cash fed cattle sales had taken place by Thursday afternoon. Analysts had predicted this was likely and expected a steady-at-best market relative to the prior week’s $132 live and $208-210 dressed market.
Every best management practices book related to beef cattle production calls for pregnancy checking the herd to identify open cows as early in the season as possible, said South Dakota State University Extension Livestock Business Management Field Specialist, Heather Gessner.
On the production side of the beef industry, the focus has become whether the nation’s beef cow herd will begin to grow and eventually result in more beef production, said Darrell R. Mark, Adjunct Professor of Economics at South Dakota State University.
Cattle and beef trade between the U.S. and Mexico has evolved over many years to increasingly complex and integrated levels. The long history of Mexican cattle exports to the U.S. was supplemented in the late 1990s with increased U.S. beef exports to Mexico.
For at least three decades, beef cattle scientists have studied body condition of cows and its impact on productivity. Cows in better body condition at calving time and breeding nearly always seem to outperform their counterparts that are in thinner body condition.
Beef exports remained on a record-setting pace in October while pork exports put up one of their strongest performances of the year, yet remain behind 2012’s record-high levels, according to statistics released by the USDA and compiled by the U.S. Meat Export Federation (USMEF).
Trade was slow to develop last week ahead and then during the sudden, intense cold weather that gripped most of cattle country. Light purchasing trickled in throughout the week, but by Thursday afternoon the bulk of the week’s trade took place at $132 live and $208-210 dressed, roughly steady with the prior week.
Beef production is falling at the end of 2013 and is expected to fall sharply in the coming year. This reduction in beef supply will add significant additional pressure to increase wholesale and retail beef prices. This leads to much concern in the beef industry that beef will “price itself out of the market.
The November Cattle on Feed report came in dead on the pre-report industry expectations. Though many have called it neutral for this reason, Steve Meyer and Len Steiner of CME’s Daily Livestock Report called it slightly bearish..