Beef market is looking up and grocery stores are using beef to entice shopper into their stores


Rachel Gabel, The Fence Post

February 1, 2019


Jim Robb, director, Livestock Marketing Center, said market outlooks are complicated by U.S. Department of Agriculture shutdowns and the information provided by the entity, much, like cow inventories supplied by producers, are ever more important. While it's not skyrocketing, Robb said the general market outlook is up and that's good news for beef producers.


"Nobody in D.C. is going to understand your industry, nobody down in Denver is going to understand how your industry is important to the state unless they can look at the numbers," Robb said.


Severe weather has had an effect on the meat market and Robb said it's a strong one. The meat market reflects demand for both retail cuts and byproducts. As the majority of byproducts are exported, that portion of the market is difficult. China buys the majority of hides, and that trade has been affected by tariffs and has pushed down the overall value of byproducts. The fed cattle market, he said, is lower than the meat market and is due in part to the weather.


Robb said the weakness in slaughter cattle prices will be this summer but yearend prices are likely to be higher than last year. Likewise, 700 to 800 weight steers are below last year though producers in the southern plains will receive $4 less than producers elsewhere.


"We've got long yearlings coming in off summer grass and we've got to be really careful, it's going to be hard to make last year's market," he said. Why is that? Because cattle feeders lost money feeding those cattle in feedlots last year and that's why they're not bidding as aggressively now on those animals because they lost a pile of money in 2018."


Calf prices are well below last year, Robb said. Last year was strong at the beginning and then flattened whereas this year, he expects the end of the year will be higher than last.


The cull cow market is unique this year, with southern plains cull cows bringing below 40 cents a pound.


"This is a market that is being pressured by really one thing at this time: the number of cull dairy cows coming in the market," he said. "The milk market is terrible and we're starting to liquidate dairies in this country. That's the added pressure."


Imported meat from Australia is down due to an ongoing drought in that country so the wild card, Robb said, is dairy cow culls. One dairy in the Pacific Northwest recently liquidated 30,000 cows that all hit the local market there in one week.


Robb expects prices to rebound and said with lower priced feedstuffs, many beef producers have held onto more cows to ride out the soft cull cow market. Robb recommends spreading cull cow sales at local markets over several weeks to avoid hitting a week with a large number of dairy cow culls. In 2018, it was the cull cow market that caused lower cow calf returns more so than cost of production or other factors. Milk prices on the futures market are picking up and slowing culls so Robb said volatility is likely only to last a few more months.


"We think the worst is behind us," he said.