Mourning and markets
I feel it is necessary to start this week’s edition with sincere condolences to the entire Crow family, who recently lost their beloved son and brother, David. This devastating tragedy has been felt by the entire Western Livestock Journal community. We want the Crow family to know that we—as a staff, readership, and friends—are thinking of the family at this time. We wish them the best in their time of mourning. May God comfort them all.
May 10 marked a milestone for Superior Livestock as the acquisition by National Livestock and a group of cattlemen from several states was announced. This transaction marks the next chapter for Superior, but more so, is a statement of business moving forward in a rebounding economy.
This agreement is nearly four years in the making, but due to an unsteady economy mixed with several other acquisitioning details, the completed sale of Superior was halted until now.
Though Superior remained the largest cattlemarketing avenue by way of video marketing over that same time span, this acquisition will now apply pressure on the competition as a more stable headquarters for the company focuses on growth and rebuilding. The era of video broadcasts is upon us as a majority of production and commercial sales are moving in that direction.
From a marketing perspective, making auctions available to everyone with internet access or a cable TV connection at any one spot on the globe is a major advantage. Being able to view a particular sale offering weeks before the actual auction is advantageous to both buyer and seller. This service is the fastest-growing segment of cattle marketing at this point. What lies ahead for Superior will be exciting to see, and moreover, what the competition does in response.
The same day as the Superior announcement also marked a positive event as the S&P Index closed at record highs as several favorable forecasts played into the market. In fact, nine of the last 10 days, the S&P has set a fresh record as several indicators continue to favor positive growth. This is exciting news; however, many Americans will not feel the benefit. The New York Times reported since 2007, 13 percent of Americans have either lost or moved their investments away from the stock market as volatility reached all-time highs in that period. Currently, only 52 percent are invested in the stock market.
A rebounding real estate market in the short term is fueling an added feeling of financial gains and is encouraging more spending of discretionary funds from the average household. According to Beef Market Central, the value of agricultural land across the Midwestern states has risen 20 percent since this time last year as beef supply weakens and demand continues to grow. Urban home values are increasing each quarter at nearly the same rate as many Americans are rebuilding credit, moving their investments, and purchasing homes. Foreign investments into housing markets are also driving values along both coasts.
A continued recession in Europe and Asia combined with a strengthening U.S. dollar is helping regain some lost market share and is helping open export markets to U.S. beef and byproducts. Oil is weakening because of the slowed demand across seas while the supply levels in North America are sufficient. Prices of gas are expected to stabilize if not decrease through the summer months rather than rise like historical data suggests.
This is all pretty good news for a forecast in our nation’s economy, especially as 165,000 jobs were created last month. Much like our beef prices over the last month and the volatility we have seen, stability in our marketplace is still fragile at this point. The opportunity for large gains is equal to the opportunity for large losses in this volatile market at this point.
We will see how Superior Livestock under new leadership, and their competitors, respond in the marketplace. With many positive factors helping the consumer household, our economy continues to make efforts towards a recovery and creates an optimistic outlook for domestic beef demand. — LOGAN IPSEN