In this file:

 

·         Supplies will keep weighing on markets

Beef production for next year is estimated to be 2.66% more than this year at 27.67 billion pounds.

 

·         Uncertainty rules as fed market weaves and bobs

Is the cattle market being manipulated? Or is working as it should?

 

 

Supplies will keep weighing on markets

Beef production for next year is estimated to be 2.66% more than this year at 27.67 billion pounds.

 

Wes Ishmael, BEEF Magazine

Sep 13, 2019

 

Cattle producers face more price pressure for at least another year before cyclical transition offers support, according to the U.S. Baseline Outlook Report Update issued by the Food and Agricultural Policy Institute (FAPRI) at the University of Missouri (MU).

 

FAPRI estimates the Five Area direct average fed steer price this year at $116.58 per cwt., falling to $113.64 and $113.83 in 2020 and 2021, respectively. After $116.72 in 2022, prices increase from $121.28 in 2023 to $130.29 in 2028.

 

For feeder cattle (basis 600-650 pounds, Oklahoma City) FAPRI pegs prices at $153.61 this year. The next three years (2020-2022) estimates are $145.28, $149.66 and $154.20. After 2022, prices are forecast at $163.61 in 2023, then increasing to $181.35 in 2028.

 

In the meantime, cow-calf returns continue under pressure from cyclically high cattle numbers, according to Scott Brown and Daniel Madison—MU Department of Agricultural and Applied Economics, in the FAPRI companion update for livestock and dairy markets.

 

“Though pasture and range conditions have been much improved this spring and summer relative to previous years, cow-calf returns have reached the lowest level in a decade as feeder steer prices decline with cattle on feed numbers continuing to exceed year-ago levels,” say  Brown and Madison. “Fed steer prices had been steady for most of the first half of the year, with recent weakness noted, due to the Aug. 9 fire at a Tyson cattle processing plant in Kansas. This has strained already tight beef packing capacity, resulting in higher beef prices along with depressed demand for cattle. Cattle and beef prices will remain under pressure as beef production grows through 2020. Good domestic demand for beef, particularly higher-quality product, continues to prevent even larger price declines.”

 

For recent perspective, the World Agricultural Supply and Demand Estimates (WASDE) for September project beef production for this year at 26.95 billion pounds, which would be 81 million pounds more (+0.30%) than last year...

 

more, including links

https://www.beefmagazine.com/market-reports/supplies-will-keep-weighing-markets

 

 

Uncertainty rules as fed market weaves and bobs

Is the cattle market being manipulated? Or is working as it should?

 

Nevil Speer, BEEF Magazine 

Sep 12, 2019

 

The phrase, “just when you least expect it,” sums up the frustration of the past four weeks. The market was trending in a good direction. Fed prices had bottomed at $110 per cwt in late June. From there, the market was working higher by trading largely $113-114 through much of July and into the first couple of weeks in August.

 

But then the unexpected happened. Tyson’s Holcomb fire was impossible to anticipate. Nevertheless, amidst a run of bigger volume and stronger prices, it was a gut punch and effectively reboots market dynamics for the foreseeable future. The fallout could prove to be significant over the long run, too. 

 

Nevertheless, in line with expectations, in the weeks that’ve followed, the market has slipped all the way back to $100-$102 (Figure 1). Surprisingly, the year-over-year average through Labor Day still has 2019 about $1.50 per cwt ahead of 2018 – and on bigger volume.

 

However, that won’t last: The October and December live cattle contracts are now trading mid-to-upper $90s, respectively. If that’s any indication, it’ll be tough sledding at least through the end of the year. 

 

Clearly, there’s a lot of work to do. However, the beef industry is proving its versatility.

 

The primary question in the days following the fire revolved around slaughter capacity. The packing sector never skipped a beat; it responded by altering schedules and got busy scheduling trucks. Consider the four weeks preceding the fire, the average Monday through Friday kill was roughly 601,000 head while Saturday’s throughput was nearly 46,000 head. 

 

In the two weeks following the fire, weekday business dropped to 581,000 head while Saturday’s kill surged to average over 74,000 head.

 

Are packers the problem? ...

 

Packer profit vs. cow-calf profit ... 

 

more, including links, chart, table 

https://www.beefmagazine.com/marketing/uncertainty-rules-fed-market-weaves-and-bobs