September 1, 2017
A customer recently asked a question
that also made a statement to which I didn't have an answer
..... it went something like this:
August 31, 2017
You'll hear about many things but you won't hear a peep about this:
The 54 Texas counties declared a disaster area due to Hurricane Harvey contain over 1.2 million beef cows, according to a U.S. Department of Agriculture inventory report.
“That’s 27 percent of the state’s cowherd,” said Dr. David Anderson, Texas A&M AgriLife Extension Service livestock economist in College Station. “That’s a conservative estimate of beef cow numbers because 14 of those counties only have cattle inventory estimates.”
Anderson noted since it is late August, a lot of calves in the affected areas are either close or ready to be marketed. The disaster area also includes a large number of livestock auction markets and Sam Kane meat processing.
August 25, 2017
The recent announcement of US Beef welcomed back to China sure sounds good on the surface.
Cattle must be identifiable to the farm or ranch they were born on in the U.S. For cattle imported to China they must be traceable through their port of entry.
Beef must come from cattle 30 months of age or younger.
Chilled or frozen bone-in and deboned beef products are eligible for shipment.
Carcasses, beef, and beef products must be uniquely identified and controlled up until the time of shipment.
Based on what we see going through our Fed Cattle Auction, only very few (and mostly none) would qualify based on one or more of the above 4 stipulations. At the very most this is a start ........ but beneficial to very few not to mention all the other items in the China trade agreement that will affect agriculture.
August 4, 2017
This is circulating on the Internet
Checking out at the store, the young cashier suggested to the much older woman, that she should bring her own grocery bags because plastic bags weren't good for the environment.
The woman apologized and explained, "We didn't have this 'green thing' back in my earlier days."
The young clerk responded, "That's our problem today. Your generation did not care enough to save our environment for future generations. "She was right -- our generation didn't have the 'green thing' in our day.Back then, we returned milk bottles, soda bottles and beer bottles to the store. The store sent them back to the plant to be washed and sterilized and refilled, so it could use the same bottles over and over.
So they really were recycled.But we didn't have the "green thing" back in our day.Grocery stores bagged our groceries in brown paper bags, that we reused for numerous things, most memorable besides household garbage bags, was the use of brown paper bags as book covers for our schoolbooks. This was to ensure that public property, (the books provided for our use by the school) was not defaced by our scribblings. Then we were able to personalize our books on the brown paper bags.
Back then, we washed the baby's diapers because we didn't have the throwaway kind. We dried clothes on a line, not in an energy-gobbling machine burning up 220 volts -- wind and solar power really did dry our clothes back in our early days. Kids got hand-me-down clothes from their brothers or sisters, not always brand-new clothing.
But that young lady is right; we didn't have the "green thing" back in our day.
Back then, we had one TV, or radio, in the house -- not a TV in every room. And the TV had a small screen the size of a handkerchief (remember them?), not a screen the size of the state of Montana.
In the kitchen, we blended and stirred by hand because we didn't have electric machines to do everything for us. When we packaged a fragile item to send in the mail, we used wadded up old newspapers to cushion it, not Styrofoam or plastic bubble wrap. Back then, we didn't fire up an engine and burn gasoline just to cut the lawn.
Please forward this on to another selfish old person who needs a lesson in conservation from a smart young person...
We don't like being old in the first place, so it doesn't take much to piss us off...especially from a tattooed, multiple pierced know it all who can't make change without the cash register telling them how much.
June 6, 2017
If you can tell me the secret success to marketing fed catte,
I'd sure like to hear it. The market trends over the last
several weeks would make a sober person start drinking.
From Tuesday to Tuesday fed cattle prices don't change a quarter
or half dollar ...... it changes $3.00; $4.00, $5.00 and today's
market was conservatively $7.00 higher than one week ago.
That's $3,500.00 on a semi load. If you're smart enough to
figure it out, let me know.
May 22, 2017
CME cattle futures have started the week with a brisk rally, with most active Aug taking its most recent high made a week ago today, powered by technical signals that have turned up, signaling the cattle market is set to take back lost ground.
Commodity traders are getting positive signals from all around- crude, grains, oilseeds, gold, the CRB index- all feel-good positive today.
News about the next step in early June to get China on-line for beef exports from the U.S. circulated as well, bolstering enthusiasm for futures further.
News lows in carcass weights last week and expectations that weights will hover in the low 830s for a month before increasing seasonally through summer and fall are viewed as another positive.
This weekend’s ‘big beef’ holiday which kicks off cookout season, Memorial Day weekend, fuels expectations for fill-in buying being brisk for another 3-4 weeks. End users are being forced to pay record high rib prices for spot purchases or do without and these sales are holding the cutout together longer than market watchers had expected.Showlists for this week dropped big in Kansas and Texas, heightening expectations that maybe cash live prices this week can hold on to steady, despite the fact it is a long week buying for a short slaughter week for packers and next week, June forward contracts can be pulled.
May 12, 2017
The White House late Thursday announced a deal whereby China, after one more round of technical consultations, agreed to resume imports of U.S. beef starting no later than July 16.
The Chinese market has been closed to U.S. beef for nearly 14 years due to concerns stemming from a case of bovine spongiform encephalopathy that occurred in Washington state in December 2003.
May 4, 2017
Cash fed cattle prices today have skyrocketed as packers scramble to get the first cut of limited, market-ready fed cattle supplies. Bids screamed higher, beginning at $137 and ending at $145 where cattle finally traded this morning- though $146 was paid as well. Western Nebraska got $147. Last week’s top in the south was $138, so cash gained $7 in a week after last week’s dramatic price surge of $5. Not since 2003 have cash cattle prices advanced this sharply in a compact timeframe. The last time cash fed cattle prices were this high was August 2015, right before the very ugly fall wash-out.
The very aggressive kill schedules of 2017 have obviously caught up with this market in full. Cattle being sold 100-200 pounds light and with short-days, week after week has created a short-term, front-end supply squeeze and made it much more important to get the first cut of cattle to make sure they grade.So, despite 2 weeks in a row of large negotiated fed cattle trade and plenty of May forward contracts now available, packers are chasing available supplies today with their whip hand. The large sold-ahead orders must be filled to book the sales realization. Packers are competing against one another on both the buy and sales side.
April 17, 2017
Every single cattle contract is either at new contract highs or near the them. Futures continue to behave in a methodical, grinding-higher fashion responding only to the stellar fundamentals this market has put together this year. Technical indicators are pushing into overbought territory, but the foundation of the move -the fundamentals- remain solid.
A quick review of the 2017 cattle market explains how we got where we are today. Today’s success story is rooted in currentness. The industry has slaughtered 517k more cattle YTD than in 2016, a testament to better beef demand. For every week that carcass weights and the number of yield grade 4s and 5s plummet, prices become more sustainable. The greatest decline in weights occurs in April so the torque of that impact has not been fully expressed. Anecdotally, northern cattle feeders are selling calves the earliest in history.
April 10, 2017
April 3, 2017
Fire Relief Donations. More than 461,000 acres in Clark County and 23,000 acres in Comanche County have been decimated in the historic Starbuck Wildfire. Recovery efforts will take years and cost tens of millions. If you would like to contribute in the rebuilding effort click here for more information http://www.ashlandcf.com/
March 9, 2017
Yesterday’s negotiated fed cattle trade was impressive. It may have gotten off to a slow start but by the afternoon, it was full out competition by packers who were forced to up bids to new highs for 2017 in some regions. Areas where market-ready fed cattle supplies are especially tight- and there are plenty of them- garnered $202 dressed and $127 to even a rumored $130 in Iowa.
Plenty of pundits had called the top in the cash market last week, a reasonable deduction given three consecutive weeks of big negotiated trade volume which included cattle bought with time. But the packers came back for more this week, driving home the point that formula numbers have yet to increase enough to take the edge off the immediate shortage.
U.S. beef exports continue to rebound and pick up steam, despite challenges that include the increased value of the U.S. dollar. According to recent results from the U.S. Meat Export Federation, by the end of last year, beef exports were 11% higher than the previous year in terms of volume and 1% more in value at $6.34 billion.Beef exports increased 11% in volume (1.19 million mt) and 1% in value ($6.34 billion) in 2016, compared with the previous year, according to the most recent statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
Superior’s Fed Cattle Exchange set the stage for higher money
early last Wednesday with a weighted average of about $122 per
cwt on more than 3,000 head. By the time country trade finished
that day, live prices were $4-$5 higher in the Northern Plains
and Southern Plains at $124-$125 ($123-$125 in Iowa-Minnesota)
Each year CattleFax shares outlooks for what could come in the near and even distant future during the Cattle Industry Convention. For 2017, the success of the beef industry might hinge on a lack of packing capacity to meet the increasing amount of fed cattle. Pork and poultry production continue to grow domestically, so it will be vital to have more trade opportunities for beef going forward.
Here are some of the facts and projections shared by CattleFax:
For 2017 cattle prices are projected to average:
January 30, 2017
From The Beef Read:
There’s an old saying, the news follows the market. Certainly, Friday’s USDA Cattle-on-feed report fits that description. Though the raw data does not really support the ‘sell, sell, sell’ futures action today, the report’s larger-than-expected placement percentage of 117% was all it took to instigate a gap-lower opening this morning.
In actuality, the cattle feeding industry placed a mere 8,000 head more cattle than it marketed. December marketings, with one less slaughter day, were huge by historical standards. The net result was 30,000 more cattle on feed January 1, 2017 than one year ago.
The expansion of the beef cattle industry is no secret and the reality that the industry will feed more cattle than the last 3 years isn’t either. Jun LC futures and beyond reflect substantial discounts to reflect that fact. Tomorrow’s annual USDA Cattle Inventory report is expected to update market watchers on that very expansion.
Also well-known is the market has been in an uptrend since mid-October. Futures were already exhibiting topping signals all last week and the COF report seems to be doing nothing more than accelerate a correction underway. Coming into today, some of the short-term technical indicators were already oversold, thus futures are holding their early lows, hanging out in mid-range for now.
The set up this year is turning out to be a cattle classic. The currentness gained by the cattle feeding industry will likely be maintained and increased over the next 3 months. There is no incentive to hold cattle. Profitable cattle sales, reasonable replacement costs and a discount futures structure are all powerful motivators for the cattle feeding industry.
Now that beef has found its way back into retail ads and consumers’ carts, beef will continue to be featured, supporting better movement through the supply chain. The choice cutout is $30.00 per cwt lower than a year ago, so beef bargains abound and will support keeping beef in the mix going forward.
The market made an enormous downward adjustment last year and bottomed when beef was discovered to have ‘value’ once again. This important and necessary development has become a fundamental factor that will provide an underlying stability to the cattle and beef market this year, and is aiding this market in finding a reasonable and realistic trading range.
January 23, 2017
From Ag Center:
Packer margins have all but disappeared. The declines in box prices and increases in live cost have taken a toll on processing margins and sent them into the red. Beef processors have had a heyday for the past six months with profits from $75-150/head common. The margins are moving in the cattle feeders favor for a change. Retailers have consistently held on to generous margins and that has helped move larger supplies of beef. The beef pipeline should not be a game sport where for someone to win, someone else has to lose.
President Trump filled the last cabinet position of Secretary of Agriculture appointing former Georgia governor, Sonny Perdue to fill the position. Secretary Perdue, not related to the chicken family is a strong advocate of free trade and as governor promoted Georgia meats and ag products around the world.
January 12, 2017
Fed cattle prices are working higher, fueled by tighter fed cattle supplies and packers needs. The Fed Cattle Exchange averaged about $1.50 higher than last week’s 5-area average. The country trade is likely to trade at $120 as well, possibly higher depending on immediate packer needs.
Boxed beef cutout values are headed in the opposite direction, dropping $10 since January 4 with more downside to come. Larger-than-normal production over the holidays coupled with very slow boxed beef sales volume last week seems to have caught the packer with too much beef unsold. It will take lower prices to clean up offerings. The confluence of these two events has squeezed packer margins dramatically and red ink (not expected until February) will likely be seen on next week’s P&L.
The good news here is the retailer has stayed on beef features, with ads on everything from 73% ground beef to bone-in ribeyes to chuck roasts and round steak and strips. Ground beef features for $1.79-$1.89 are common. If there is good clearance to the consumer, then the clean-up of boxes at lower money ought to be good.
From Cattle Market web page:
The live sectors of the beef business have been left out for the past two years. Finding a balance between supply and demand amid improving prices is the first step towards finding a stable price level for sharing of margins across all sectors.
Live cattle sold mostly at $118 across all regions on Friday. In the north dressed sales ranged from $187-190 -- with the bulk of sales at $188. Sales volumes were moderate with several cattle owners passing the $118 bids.
The lapse in slaughter rates at the nation's beef plants got immediate response from the retail business and sent box prices higher. Profit on beef sales at both retail and wholesale level is encouraging beef featuring whether on the menu or at the grocery counter. Nothing is better for a beef market than allowing a profit margin for those handling the product.
If there were any rational arguments against cash settlement, which there are few, anyone watching the expiration of the December contract would realize the current delivery settlement is archaic and inappropriate. Hedged cattle owners waiting for cash trades on the last day before closing their positions might have been filled at $123.75 -- $6 cwt. above the cash trade on Friday. Would that be called convergence?
December 30, 2016
Cattle on Feed down 1 percent
Placements in feedlots during November totaled 1.84 million head, 15 percent above 2015. Net placements were 1.77 million head. During November, placements of cattle and calves weighing less than 600 pounds were 470,000 head, 600-699 pounds were 490,000 head, 700-799 pounds were 425,000 head, and 800 pounds and greater were 458,000 head.
Marketings of fed cattle during November totaled 1.79 million head, 17 percent above 2015.
December 2, 2016
From the Drovers Journal:
Do the facts bear out those claims? In a word, no.
U.S. Department of Agriculture data for both beef and live cattle imports show decline in 2016. U.S. beef imports through September were 11% lower than the previous year, and Sterling Marketing president John Nalivka projects that’s about where the year will end. Nalivka projects another 12% decline in beef imports in 2017.
Similarly, USDA reports live cattle imports through September were down 18% compared to 2015.
Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, says cattle and beef imports have been a factor in the cattle markets for a long time, so “to cause the dramatic decline in our markets that we saw this year we would have needed a catastrophic increase in imports. In fact, they’ve gone down.”
Additionally, a case can be made that imported beef can add value to U.S. beef carcasses. That’s because a lot of the imported beef is lean that gets added to the grind of hamburgers.
Economists and industry leaders believe that trade must be a two-way street. In that regard, the U.S. beef industry is profiting when comparing imports and exports.
According to USDA data reported by the U.S. Meat Export Federation, export volume for the Jan.-Sept. period was 8% above last year, and the value was $4.54 billion. The value was down 5% from last year, partially due to a weaker U.S. dollar.
Beef exports accounted for 13.5% of total beef production in the Jan.-Sept. period, and the export value per head of fed slaughter averaged $256.98 in September.As for the “growing tide” of imported beef some claim, the long-term trends don’t support such allegations. The U.S. will import about 3 billion pounds of beef in 2016, which would be nearly 3% less than the 3.085 billion pounds imported a decade ago.
There seems to be no rhyme or reason for price movements in the finished cattle market, but prices rose sharply this week which is good news for cattle feeders. The futures market sprang into action last Wednesday following the trade on the Fed Cattle Exchange managed by Superior Livestock Auction. Wednesday’s surge set off a frenzy of cattle trading on Thursday which essentially wrapped up the cattle trade for the week.
Higher prices are welcomed by most in the industry even though an increase in the middle of November is rare as the market tries to wrap up Thanksgiving items. There remains upside potential in the fed cattle market, and a trade above $110 in the next couple of weeks would be a very positive sign.
November 21, 2016
Placements in feedlots during October totaled 2.17 million head, 5 percent below the same period one year ago. Net placements were 2.11 million head.
During October, placements of cattle and calves weighing less than 600 pounds were 610,000 head; 600-699 pounds were 525,000 head; 700-799 pounds were 471,000 head; and 800 pounds and greater were 565,000 head.
Marketings of fed cattle during October totaled 1.71 million head, 5 percent above 2015. Other disappearance totaled 57,000 head during October, 24 percent below 2015.
November 4, 2016
Veterinary Feed Directive webinar
available on YouTube
October 28, 2016
For much of this year cattle producers have been warned that increasing supplies of red meat and poultry would pressure prices. That forecast has played out over the past month as prices for all classes of cattle declined 12% to 13%.
There are signs that suggest cattle markets have finally found a bottom and will move modestly higher. Positive movement began last Thursday as CME futures markets rallied for three consecutive days. That optimism was supported by Friday’s USDA cattle on feed report that found inventory numbers smaller than expected and September placements down 2% from last year.
October 28, 2016
The Manchester Press (our local newspaper) has a section Way Back When that details news events in 10 year segments going back to 60 years ago. In the October 26, 2016 edition from 40 Years Ago (November 10, 1976) is the following: Corn harvest was 90 percent done with an average corn yield reaching only 85 bushels per acre ... this was down 12 bushels per acre from the year before. Soybean yields wre in the 30 to 40 bushels per acre.
October 17, 2016
CME Group Inc (CME.O) is considering switching to a cash settlement process for its live cattle futures, a managing director said on Thursday, as traders continued to complain about extreme volatility.
Dave Lehman, managing director of commodity research and product development, said discussions about the new settlement procedure were part of an all-encompassing review of the market by CME, driven by concerns about price swings.The CME change, if implemented, would be a major attempt to restore confidence in the market by adjusting the way it operates
Brazilian beef processor Marfrig's unit in Paranatinga, located in Mato Grosso state, received authorization on Sept. 21 to start exporting fresh beef to the United States. It will be the company's second plant to be allowed to sell the product to North America since the market was opened in August.
The company had already sent its first shipment to the US last week with fresh beef produced in its plant in Bataguassu.
All the largest Brazilian beef processors, including JBS and Minerva, have already gained authorization to export fresh beef to the United States. Brazilian exporters can sell up to 71,400 tons of fresh beef to the U.S. per year, competing with other countries in Central America.
JBS said in a separate note to the press that it has shipped 27 tons of fresh beef to the United States as of Friday, from Brazil's Itapoá port, in the southern state of Santa Catarina. The shipment is expected to arrive in the U.S. in about two weeks.
September 16, 2016
The finished cattle market continues to find a way to decline as cattle feeders continue moving animals in a timely manner. Declining prices may be sending the wrong signal, but it may result in decent prices late in the fall.
Declining cattle prices and wholesale prices have allowed restaurants and grocers to reduce beef prices the past few months. As of July, the all fresh retail price of beef was $5.75 per pound which is the lowest retail beef price since July 2014, and 40 cents lower than its peak in July 2015.
The struggle for beef continues to be its relative price compared to competing meats. From 2006 through 2012, the all fresh retail price of beef was 1.3 times higher than the pork retail price and 3.3 times higher than the broiler retail price. From 2013 through July 2016, the beef to pork retail price ratio has averaged nearly 1.5 while the beef to broiler ratio is just above 3.7. The ratios for July 2016 were 1.5 and 4.0 for beef to pork and beef to broiler respectively.
These ratios are important because consumers do use relative prices at the meat counter. Research has demonstrated that pork and chicken are weak substitutes for beef, but consumers are looking for ways to stretch every dollar.
August 29, 2016
This is from AgCenter
It is too easy to blame the market deterioration on weak sellers. It also is too easy to blame predatory packers for doing what anyone familiar with markets would do -- continue buying lower so long as there are sellers remaining willing to accept lower bids. The simplest explanation is the conditions of the marketplace are structurally right for this type of trading. Deeply discounted futures create an incentive to sell now rather than later. Any rational analysis can demonstrate an economic advantage to cashing in now rather than wait and sell dollars cheaper tomorrow. With all the bad news, there is little optimism to be found, but normally that is the situation when the market can surprise.
August 22, 2016
August 1, 2016
So here we are starting the month of August. I haven't
seen any statistics yet, but here in Northeast Iowa I gotta
believe this could be one of the wettest Julys in history.
Never before do I remember everything this green at this time of
year ...... and the corn & bean crop looks absolutely fantastic.
Crop prices are certainly lower, but it sure looks like there's
gonna be a record (or near) crop. On the flip side, it's
been miserable to get hay made here in Northeast Iowa but I can
only remember a few years when it wasn't miserable for hay
making ..... guess that's why year in and year out those dry
climates out west produce hay and not corn/beans.
July 18, 2016
Sometimes it's easy to get the feeling of "what the he## is
going on in this world"!! I suspect the older one gets,
the more prevalent that feeling? In our individual life we
sometimes get an opportunity to make a difference in the life of
others. Such an event took place this past Saturday July
16th at the Delaware County Fair livestock auction. In
honor of Anna Nefzger a fund has been established through
Maquoketa Valley Dollars For Scholars ...... and at the Fair
Auction there was a "roll over auction" of a fair steer owned by
Anna's cousin Jamie Nefzger. Pages and pages could be
written about this outpouring of generosity ..... at the
conclusion of the "roll over auction" a total of $40,628.00 was
given for the scholarship fund and as of today's writing we're
informed the amount is near $45,000.00 and growing.
July 11, 2016
June 28, 2016
At a minimum, the cattle futures need
to lose the volatility and be able to perform as a risk management
tool. The Government Affairs committee discussed this at LMA’s
annual convention this month and provided staff directive to get
more engaged in the topic and especially push the CFTC to better
regulate the CME and potential illegal activity (i.e. Spoofing)
going on in the cattle contracts by high frequency traders.
To that, I say AMEN. When our
markets are falsely influenced by people who don't know a steer from
a heifer, or a corn stalk from a bean plant, then I think it's time
to make changes.
To that, I say AMEN. When our
markets are falsely influenced by people who don't know a steer from
a heifer, or a corn stalk from a bean plant, then I think it's time
to make changes.
June 20, 2016
This is from BEEF ..... not from Marvin ..... but it sure has lots
to think about:
In a recent "Economic Letter" from the Dallas Federal Reserve titled “Stock Market Provides Imperfect View of Real U.S. Economy” says that the stock market, through measures such as the Standard and Poor’s 500, is often thought to be an economic bellwether. However, market volatility compromises the reliability of such indexes.
I don’t know if we can draw parallels between the stock market and the futures market. I’m not an economist. But it’s clear that volatility in cattle futures has compromised that market’s ability to be an economic bellwether for beef producers and the beef business.
Is it time to seriously discuss whether or not cattle futures have a place in the beef business? I think it is.
This is Marvin's thoughts: The "Live Cattle" contract was introduced to function as a risk management tool. With advanced technology and a greater diversity of participants, a good size percentage of trades at the CME are done by people who don't know a steer from a heifer. One little voice won't change a thing .... but there could be strength in numbers. http://www.senate.gov/senators/contact/ or http://www.house.gov/representatives/ don't just complain, do something.
June 17, 2016
June 13, 2016
The latest beef and cattle trade data shows a mixed bag of global market impacts. Total beef exports were down 5.3 percent in April compared to last year. This follows year over year increases in January and March and leaves the year to date total through April 0.4 percent below the same period in 2015. Exports to two major U.S. beef markets, Japan and Hong Kong, were both down compared to last year after increasing earlier in the year. April exports to Japan dropped 10.9 percent year over year and exports to Hong Kong decreased by 36.9 percent compared to last year. This leaves year to date beef exports to Japan up a scant 0.6 percent while exports to Hong Kong are down 2.3 percent for the first four months of the year. Beef exports to South Korea were down fractionally in April but are still up 12.2 percent for the year to date compared to last year. South Korea was the only major beef export market to show year over year increases in 2015. Exports to Canada continued year over year decreases in April, down 6.8 percent compared to one year earlier and down 8.2 percent for the year to date compared to last year. In better news, beef exports to Mexico have improved the last two months after being down in January and February. April beef exports to Mexico were up 32.9 percent year over year with the year to date total now down 0.9 percent from last year.
Not that every day isn't interesting, but the next couple of weeks will be very interesting. As this is being written, the cash market is in the upper 120 range perhaps to the low/mid 130 range at most fed cattle auctions here in Iowa - - - at the same time June futures (which go off the board in a couple of weeks) are limit down today at $119.40! Something has to give and hopefully it isn't cash.
May 31, 2016
USDA's May Cattle on Feed report said there were 10.783 million cattle on feed at the start of April. That was 1.3% more than a year ago and the most for any May since 2012. April placements were up a surprising 7.5%. May was the third consecutive month with placements higher than a year ago. April marketings were 1.2% more than in April 2015 despite one fewer slaughter day.
There were 452 million pounds of beef in cold storage at the end of April according to USDA's monthly Cold Storage report. That was down 3.2% from the month before and down 6.6% from a year ago. That is the smallest stocks of frozen beef since the end of 2014. Stocks of pork in cold storage were down 9.4% at the end of April compared to 12 months earlier. Frozen chicken in cold storage was up 5.3% and turkey stocks were up 0.7% compared to a year earlier.
USDA estimates that only 8% of U.S. pastures were in poor or very poor condition on May 22. That is the same as the week before and down 2 points from a year ago.
May 23, 2016
From Ag Center:
COF 1 May 1: 10.783M head, 101.3% of a year ago
Placed in April: 1.664M head, 107.5% of a year ago
Marketed in April: 1.658M head, 101.2%
The surprise from a report that very consistently has been matching
pre-release guesses is the placement number. Placements in April
were 107% of prior year exceeding guesses of 97%. Gathering numbers
at USDA for the cattle on feed reports is an arcane process
involving mailing out surveys and can and should be regarded as less
than scientific in a digital age. Nonetheless, a placement number
this large, if not revised by a later report will be bearish for the
The surprise from a report that very consistently has been matching pre-release guesses is the placement number. Placements in April were 107% of prior year exceeding guesses of 97%. Gathering numbers at USDA for the cattle on feed reports is an arcane process involving mailing out surveys and can and should be regarded as less than scientific in a digital age. Nonetheless, a placement number this large, if not revised by a later report will be bearish for the fall months.
A positive operating environment for cattle feeding is a good swap
rate. Cattle feeders able to sell a current animal on the spot
market at premium prices to the board and replace with an animal
having a lower breakeven than the current breakeven. This situation
encourages timely sales with reduced carcass weights and active
replacements. This along with profitability which has been lacking
are hallmarks of a healthy industry.
A positive operating environment for cattle feeding is a good swap rate. Cattle feeders able to sell a current animal on the spot market at premium prices to the board and replace with an animal having a lower breakeven than the current breakeven. This situation encourages timely sales with reduced carcass weights and active replacements. This along with profitability which has been lacking are hallmarks of a healthy industry.
May 18, 2016
A judge said Tuesday that Kansas can't require people to show proof of U.S. citizenship when registering to vote for federal elections at motor vehicle offices. U.S. District Judge Julie Robinson ruled that the state's proof-of-citizenship requirements likely violate a provision in the National Voter Registration Act that requires only "minimal information" to determine a voter's eligibility. She ordered Kansas to register thousands of voters whose paperwork is on hold because they did not comply with the requirement. But she put her preliminary injunction on hold until May 31 to give the state a chance to appeal.
May 11, 2016
Increasing beef production is certainly pressuring cattle prices, which in turn is pressuring feeder and calf prices lower. But there are a few things that may provide some support to cattle prices going forward. One, it appears that cattle are being pulled ahead to market sooner. The number of cattle on feed more than 120 days has fallen below year ago levels. Pulling cattle ahead can reduce the number ready for slaughter later in the Spring and Summer. Weights are declining seasonally. Beef by-product values have been increasing, up nearly $1 per cwt. in the last 2 months. The live-to-cutout spread was the third largest weekly estimated figure, at $257 per head, going back to 1991.
While there might be some good reasons for higher cattle prices coming soon, the reality is lower prices now. Large beef production is a major culprit in lower cattle prices. The long term trend is for more beef production and lower prices as cattle numbers expand.
The following is from the Dunlap Livestock
Auction web page at Dunlap, Iowa - - thanks to the Schaben
Family not only for this but also what you do for the livestock
April 21, 2016
USDA has raised their estimate of 2016 U.S. beef production to 24.825 billion pounds. That is up 1.2% from their previous estimate and up 4.8% compared to last year's production. They expect 2016 slaughter steers prices to average somewhere around $134/cwt of live weight. That is $3.50 lower than their previous forecast and $14 lower than the 2015 average.
More beef and lower prices should be positive for U.S. international trade. USDA looks for U.S. beef exports to increase 8% in 2016 and is predicting a 14% decrease in U.S. beef imports. The U.S. was the fourth largest beef exporter in 2015 after Australia, India, and Brazil.
China has been steadily increasing their beef imports and USDA expects them to pass Japan this year to become the world's number two beef importing country, behind the U.S.
April 20, 2016
April 14, 2016
USDA raised its
2016 forecast of total red meat and poultry production from last
month as higher expected cattle slaughter and heavier carcass
weights more than offset a lower pork production forecast, the
agency reported in its World Agricultural Supply and Demand
The cattle price forecast is reduced from last month on relatively weak demand and larger expected fed cattle supplies. USDA now estimates average steer prices this year at $131 to $137 per hundredweight, down from last month’s forecast range of $133 to $142.Corn
USDA made few changes to its supply and demand projections for corn, but did lower its average price forecast for the year slightly to a range of $3.40 to $3.70 per bushel from last month’s forecast range of $3.40 to $3.80
April 12, 2016
April 12th from the Drover's Journal. The average steer dressed weight for the week ending on March 26 was 887 pounds, down 8 pounds from the week before, but up 13 pounds from a year ago. This was the 93rd consecutive week with steer weights above the year-ago level.
March 31, 2016
The factors of expansion have finally all aligned. Just as the severe drought from 2010 to 2012 reduced total herd numbers to 60-year lows, record-high prices in 2014 and abundant moisture have encouraged ranchers to rebuild herds at an unprecedented pace.
The USDA–National Agricultural Statistics Service (NASS) reports U.S. cattle inventory stood at 92 million head on Jan. 1—the first total inventory of more than 90 million since 2012 and the biggest year-over-year increase since 1981. That’s also a 3.5 million-head increase in two years, and the largest total herd since the 92.9 million reported in 2011. Increases in the 2015 and 2016 inventories followed seven consecutive years of decline.
Nalivka’s analysis of NASS data and his own balance sheet comparing slaughter numbers with herd counts suggest the current expansion phase is occurring at a record pace.
“Beef-cow slaughter totaled 2.3 million head in 2015,” Nalivka explains. “That represents 7.7% of the beef cowherd—the smallest percentage of beef cows slaughtered since at least 1965.”
Reductions in cow slaughter and increases in heifer retention helped increase the 2016 beef-cow inventory to 30.3 million head, an increase of 3.4%. This means producers should expect lower prices in 2016, even after the downtrend in 2015
From the Drovers Journal: There were 491 million pounds of beef in cold storage at the end of February. That was 5.3% less than the month before and 0.3% less than a year ago. Total frozen stocks of red meat were down 4.7% from a year ago. Stocks of poultry in cold storage were up 9.5%.
March 10, 2016
From Beef Magazine:
“Just because we can, it doesn’t mean we should,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. That’s the primary lesson he believes can be gleaned from the late summer-early fall market slide that sucked at least 20% out of the value of calves in a matter of weeks.
He’s referring to the genetics and management tools that enable feeding cattle to extraordinay finish weights. Study the record carcass weights of late with the dog-eared, bell-shaped statistical curve in mind, and it’s easy to believe various reports of steers weighing as much as a ton. Though there were other contributors, the backlog of overdone cattle fueled the price slide.
“What happened, especially for fed cattle markets, was a necessary correction to provide the market signals to fix a problem that developed over several months due to a lack of proper market signals,” Peel says.
“Feedlots were pushing carcass weights for months, abetted by packers, since both had individual as well as market incentives to offset lack of cattle numbers with additional carcass weight. However, there are both biological and market limits to how far weights can be pushed before, relatively abruptly, hitting a wall.”
Without the usual market signals — heavyweight carcass discounts and only modest ones for Yield Grades 4 and 5 carcasses that came too slow — Peel explains there was no incentive to add fewer pounds until cash prices dipped below the cost of marginal gain.
“It is pretty clear that we can continue to make steaks bigger, but it is not at all clear that we can sell them profitably,” Peel says.
At the same time, Peel says there are other evolving big-picture issues that merit consideration. There’s the added volatility created by the global economy, for one thing. For instance, one reason U.S. beef exports continue to struggle year over year — while domestic beef demand continues to maintain its ground — is the strength of the U.S. dollar and related global economic factors.
Closer to home, arguably, it’s also getting tougher to ferret out what cattle are worth. “If you buy cattle today, it’s difficult to use futures to manage risk,” Peel says. “The futures market [for cattle] came unhooked from the cash market more than a year ago.”
Suffice it to say, a growing number of folks are questioning the relevance and value to risk management of cattle futures that are whipsawed by non-market forces like mechanized, high-frequency trading, and non-fundamental factors such as the aggregate sea-shift changes of non-commercial positions.
The impacts, Peel explains, are magnified in thinly traded markets like cattle futures, especially feeder cattle futures.
Arguably, cash markets continue to lose transparency, too, as cash trade dwindles and other transactions occur beyond the boundaries that require reporting.
Although easier said than done when dollars and hope are evaporating, Peel says the latest wreck is also a reminder to remain calm. Folks who bailed out amid the market decline missed the price rally that began the second week of October. About 10 days into the price rally that started the first full week of October, Peel believed that prices would recover further — as long, that is, as the heavy cattle continued to clear the market.
Peel also pointed to the value of gain — it didn’t budge much before or after the price slide — as further indication of fundamental price support. “Don’t get caught up in thinking a short-term problem is necessarily reflective of the bigger picture,” he says.
Although peak prices are in the rearview mirror, the short cattle numbers that spawned increased prices remain. Depending on how many folks got spooked and altered expansion plans, this fundamental force could last longer.
Representatives for the renowned W.T. Waggoner Ranch announced
that Judge Dan Mike Bird of the 46th Judicial District Court has
allowed the Waggoner’s owners to proceed with a private
transaction under which Stan Kroenke, American businessman,
professional sports team owner and rancher, will become the
Waggoner’s new owner.
This historic transaction will be the first-ever sale of the
Waggoner, an approximately 535,000 acre estate which was
established in 1849 and spans across 6 Texas counties and almost
800 square miles. It is currently the largest ranch under one
fence in the U.S., and includes thousands of cattle, hundreds of
horses and oil wells, and 30,000 acres of farmland. Listed for
$725 Million but the terms of the
potential transaction were not disclosed.
From Agcenter.com - -
The largest puzzle in the beef complex is understanding where we are from the demand side of the equation. Exports are improving and imports are decreasing -- both favorable to beef domestic demand. Unfortunately, the dollar rebounded late last week and this morning which will make all our ag products more expensive for export and might slow recent improvements in export numbers. Retail prices are some lower but not a lot. Seasonally, beef demand improves into the spring but very cheap pork and lower priced chicken will threaten beef's market share. The recent storms on the east coast and most recently in the mid west tend to disrupt beef movements and can interfere with demand patterns.
Box prices fell at week's end and the recap on the weekly slaughter was set at 538,000 cattle down from 568,000 the previous two weeks. There was disappointment in seeing the slaughter rate drop and the box prices fall at the same time -- not a good combination
The United States is at risk of losing $100 million in beef exports to Japan as a result of the trade agreement Japan and Australia signed last year, according to USDA’s Economic Research Service.
In a report titled “Tariff Reforms and the Competitiveness of U.S. Beef in Japan” the agency noted that although Japan’s ground meat markets are supplied overwhelmingly by Australian frozen beef and Japan’s offal imports are an area of particular U.S. strength, Australian and U.S. beef cuts compete strongly in Japan’s market.
The Japan-Australia Economic Partnership Agreement (JAEPA), which took effect at the beginning of 2015, provides tariff reductions for Australian beef that are phased in over a 15-year period. USDA evaluated the full implementation of JAEPA in comparison to recent trade conditions.
CattleFax outlook from
Cattle Industry Convention
Here are some of the facts and projections shared by CattleFax: