– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

FED CATTLE: Fed cattle traded steady compared to last week. Prices on a live basis were mainly $124 while dressed prices were mostly $198 to $199.

The 5-area weighted average prices thru Thursday were $124.00 live, even com-pared to last week and $199.07 dressed, up $0.43 from a week ago. A year ago, prices were $125.00 live and $197.00 dressed.

Following the strong run in finished cattle prices in December and a strong start to January, fed cattle prices have stagnated the past couple of weeks. Despite the appearance that prices have stalled, this should still be considered positive for cattle feeders. January and February are not known as strong beef demand months nor are they known for having the best finished cattle prices. The upside to current prices is that beef and cattle demand are strong in the spring which should bode well for the price of finished cattle moving into the spring. There remains potential for the cash market to trade over Continue reading →

– Josh Maples, Assistant Professor & Extension Economist, Department of Agricultural Economics, Mississippi State University

The latest Monthly Trade data for November 2019 was released by USDA Economic Research Service last week. The report continued the recent trend of lower monthly exports as compared to 2018. After three consecutive years of double-digit increases (2016-2018) in beef exports, current data show January-November 2019 exports to be down 4.6 percent compared to the same period in 2018. There are also new and hopeful trade deals to add to the mix with Japan, Canada, Mexico, and China. Needless to say, there are plenty of moving parts for 2020.

November 2019 beef exports were 8 percent below the same month of 2018 at just under 245 million pounds. For January-November 2019, exports to four of the top five destinations were lower (Japan, Mexico, Canada, Hong Kong) with the exception of South Korea which is up 6.3 percent. Japan is still the top destination for U.S. beef though the gap between first and second place narrowed. Through November 2019, 26.5 percent of U.S. beef exports went to Japan and 22.6 percent went to South Korea. In 2018, 28 percent of beef exports went to Continue reading →

– David P. Anderson, Professor and Extension Economist, Texas A&M AgriLife Extension Service

And kept it going to begin the new year. Rising fed cattle prices continued their run into the first week of the new year, hitting $124-125 per cwt.

Fed cattle prices tend to increase seasonally from late summer lows to the end of the year. It’s also not uncommon for prices to weaken between Thanksgiving and Christmas and again in February before the Spring rally. Fall’s price rally has been stronger than average. Over the 2013-2017 5-year period the average rally has been about $11 per cwt, or 8.8 percent, from the last summer low to the end of the year. The Fall rally in 2018 totaled $15 per cwt or a Continue reading →

– Dr. Elliott Dennis, Assistant Professor, Livestock Marketing Economist, Department of Agricultural Economics, University of Nebraska – Lincoln

This past year has seen several important trade agreements agreed to which will directly benefit the beef complex. The Japanese-U.S. trade deal will effectively lower tariffs for 90% of beef commodities from 38.5% to 9% between 2019 and 2033. The European Union-U.S. trade deal will increase the quota limit of hormone free beef for the U.S. to 35,000 tons (~80% of quota limit) over the next seven years. Lastly, this past week the U.S. House of Representatives voted to pass USMCA which will now go on to the Senate for final approval. This deal will continue to allow livestock products to be exported to Canada and Mexico, the two largest export destinations for U.S. livestock products.

So why has there been so much attention on securing export deals that are favorable for livestock products and in particular for beef? The short answer is because that is where demand is growing. Figure 1 clearly illustrates this story. I plot monthly data from Glynn Tonsor’s Domestic and Export Demand Indices (see Meat Demand) from 2010 to 2019 side by side. Domestic demand (left panel) for beef products fluctuates year to year but overall demand is trending sideways. Chicken has shown the largest increase in domestic demand since the late 1980’s. Export demand (right panel) tells a different story. Since 2010 export demand for beef has increased 100% and Continue reading →

– Stephen R. Koontz, Department of Agricultural and Resource Economics – Colorado State University

Without a doubt, the cattle markets are closing the year far stronger than I expected.  Live cattle futures have pushed into new highs and cash fed cattle prices are back to tracking the price levels and seasonal patterns of last year.  There were some unique market drivers that I discussed last month.  Most are still present, are not typical, and are worth talking through again.

The market has handled the steady seasonal climb in fed animal dress weights, continues to move fed animals in a timely manner, the packing sector continues to run substantial Saturday slaughter, and we are on the cusp of Tyson’s Holcomb facility returning to substantial operations.  Packer margins are softer but remain above $400 per head and atypically retailer beef margins continued to shrink.  I see the retailer and food service as driving the strength into Continue reading →

– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee

FED CATTLE: Fed cattle traded steady to $1 higher compared to last week on a live basis. Prices on a live basis were mainly $119 to $120 while dressed prices were mostly $188 to $190.

The 5-area weighted average prices thru Thursday were $118.81 live, down $0.14 from last week and $188.11 dressed, up $0.37 from a week ago. A year ago, prices were $117.00 live and $186.51 dressed.

The strength in live cattle futures provides a little promise that finished cattle could trade over $120 before the end of the year. Whether it does or does not, there is likely to be few complaints from cattle feeders. A few cattle traded at $120 this week, but the weekly weighted average has yet to reach that level. The two thoughts on many cattle feeders’ minds now is avoiding Continue reading →

– Matthew Diersen, Risk & Business Management Specialist, Ness School of Management & Economics, South Dakota State University

At a recent producer meeting, people were talking about mandatory livestock price reporting in the broader context of fed cattle marketing. South Dakota has enough fed cattle to be reported in cattle on feed statistics. The large feedlots (1,000+ head) in the state typically have a strong seasonal pattern in placements, peaking in October, with limited variability in marketings. However, as a smaller feedlot state not many direct price reports have much information specific to South Dakota. An exception are the various committed and delivered reports, which give a breakdown by region of origin for fed cattle transacted for harvest. The region Northern Plains / Eastern Mountain contains North Dakota, South Dakota, Montana and Wyoming. The monthly version of the report, LM_CT143, is available here: https://www.ams.usda.gov/mnreports/lm_ct143.txt

The focus here is mainly on the Northern Plains / Eastern Mountain region, both for specific insights and to provide a possible template to analyze other regions. In November of 2019 the volume of cattle delivered from this Continue reading →