In this file:
· Who’s right, the Beef Board or R-CALF?
· R-CALF disputes Cattlefax beef trade analysis
Who’s right, the Beef Board or R-CALF?
R-CALF takes exception to the idea that increased beef demand helps the cattle market. Here’s a look at the numbers.
Nevil Speer, BEEF Magazine
Feb 04, 2019
A recent Cattlemen’s Beef Board (CBB) news release noted that, “2018 retail beef demand is 15% higher than in January 2012…so beef demand is indeed strong.” R-CALF subsequently followed with a press release of their own attempting to debunk that assertion:
“If that is true, then cattle prices should have increased over the same period…But that did not happen. Instead, fed cattle price fell nearly 5% during the same period that beef demand increased 15%. … This indicates something is terribly wrong with the structure of the cattle industry’s markets. The 2012 average 5-area fed cattle price of $122.96 per cwt should have increased in 2018 rather than decrease to a $117 per cwt price …”
Two separate news releases on opposite sides of the coin. Which one is correct? To evaluate those assertions, we need to ensure we’re comparing apples to apples. Accordingly, this week’s illustration provides some further context.
Note the CBB release uses January 2012 as a base. Beginning in 2012, the fed cash market was averaging $115 per cwt. (not $122.96 as claimed by R-CALF) against weekly production of about 495 million pounds. Fast forward through 2018, the fed cash market finished with a $117 average while producing nearly 508 million pounds on a weekly basis.
In other words, between 2012 and 2018, both beef production and prices increased. That happens ONLY because of improved beef demand. As such, the R-CALF release misrepresents what’s really going on in the industry.
Several other things are important here. One, there have been several key plant closures since 2012, thereby eliminating excess packing capacity...
more, including chart
R-CALF disputes Cattlefax beef trade analysis
By Julie Harker, Brownfield
February 4, 2019
The head of R-CALF USA disputes the CattleFax beef trade analysis which says U.S. producers are selling more beef than the U.S. is buying.
Bill Bullard says the opposite is true when imported live cattle are taken into account and he says they should be, “When you add that on to the import volumes coming in as the commodity beef you see that the United States has generated a trade DEFICIT for the past 20 some years, and that is, we are buying more than we are selling.”
Bullard says the U.S. cattle industry is being forced to absorb the over-production and over-capacity of other countries, “And as a result, we are weakening our industry and reducing opportunities for current cattle producers and particularly for young cattle producers who want to get into this industry.”
Bullard says the CattleFax report is geared toward meatpackers...
more, including audio report [6:39 min.]