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"Perfect Storm" Paints Rosy Cattle Market Picture

"Perfect Storm" Paints Rosy Cattle Market Picture

8/1/2014 1:45:00 PM/Categories: Popular Posts, General News, Today's Top 5, Livestock, Cattle, Organizations, NCBA - National Cattlemen's Beef Association

Kevin Good, CattleFax Analyst, told Cattle Industry Summer Convention that the fundamentals are strong while urging producers to beware of the ceiling.

The following article is a release from the National Cattlemen's Beef Association: 
 
DENVER (August 1, 2014) – The cattle industry is transitioning from the liquidation phase to the expansion phase in terms of cattle numbers, according to Kevin Good, senior market analyst for CattleFax.  When combined with a very robust domestic and global demand for beef, it helps point to a rosy picture for the industry. Good made the remarks during a general session of the 2014 Cattle Industry Summer Conferences in Denver August 1. The conference will run through Aug 2.  

“It’s one for the ages,” Good said, referring to the cattle market. “It’s been a tremendous change from a year ago.”

Good said the industry is accelerating the rate of expansion, and “it’s a great opportunity to take advantage of the trend.” However, while the fundamentals are “friendly,” he said, “the market will have a correction.” And that correction could be soon. “Something needs to give,” he said. “You have to be prepared for that ceiling,” he told the hundreds of cattle producers in attendance.

Good said a “perfect storm” was in place for the industry in terms of profitability. There’s a tighter animal supply in general, with the PED Virus in the pork industry and hatchability and genetic issues in the poultry industry keeping pork and chicken supplies in check. With all animal protein supplies stable and prices increasing, beef is not that far out of line, he said.

Good said calves in 2014 are averaging $2.40 cwt., while feeder cattle are $2 and fed cattle $1.50. He said CattleFax expects prices should be stronger again on average in 2015, but larger supplies of beef by 2016 and larger total meat supplies will limit prices by then.

Lowering corn prices are giving the industry some relief. They are the lowest since 2010, and are expected to average in the $4 per bushel range, and possibly in the upper $3s, for the year. Production in 2014 is expected to be in the 14 billion bushel range, he said.

Range conditions are the third best they have been in the past 20 years, Good said. El Nino has been moderately strong, and is also providing relief to much of the country devastated by drought. However, he said the industry is still in the midst of a 20 year drought, so producers should still be cautious about conditions for 2015, 16 and 17.

Exports are increasing, and will continue to be a key component of producer profitability, according to Good. The China market (including Taiwan and Hong Kong) has become the top importer of beef in the world, and will continue to be a critical export market for beef producing countries in the future. Good said about 17-18 percent of a beef animal’s value is exported in beef, variety meats and hides, and producers should recognize the importance of this income source.

“We are living in extraordinary times,” Good said. “And prices are going to be continually strong over the next couple of years.” Still, he urged producers in the audience to exercise caution. “It’s easy to be optimistic today,” he said. “But markets don’t go up forever.”

General Session II led off day two of the Summer Conference, which includes meetings of the National Cattlemen’s Beef Association, Cattlemen’s Beef Board, American National CattleWomen and National Cattlemen’s Foundation. Among the purposes of the yearly conference is to create a framework for checkoff and policy efforts on behalf of U.S. cattle producers for the 2015 fiscal year, which for NCBA and the Cattlemen’s Beef Board begins Oct. 1.

Joint Committees and Subcommittees continue meeting Friday to develop proposals for 2015 checkoff-funded research, education and promotion programs. Also on Friday NCBA policy committees will meet to determine priorities and discuss strategies for 2015. The NCBA Board will hold a session on Saturday, as will members of the Cattlemen’s Beef Board. 

 

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The National Cattlemen's Beef Association (NCBA) has represented America's cattle producers since 1898, preserving the heritage and strength of the industry through education and public policy.  As the largest association of cattle producers, NCBA works to create new markets and increase demand for beef.  Efforts are made possible through membership contributions. To join, contact NCBA at 1-866-BEEF-USA or membership@beef.org.

CattleFax is a member-owned organization that serves producers in all segments of the cattle and beef business. CattleFax is the global leader in beef industry research, analysis and information. Since 1968, the organization’s exclusive industry database has set the standard for market information and analysis. Visit www.cattlefax.com to learn more and become a member.

 

© Copyright 2014 National Cattlemen's Beef Association, all rights reserved. 
Posted by Haylie Shipp

 

 

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1 comments on article ""Perfect Storm" Paints Rosy Cattle Market Picture"

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Katrin Kolder, DVM

8/24/2017 10:06 AM

Hey Cattld-Fax and NCBA....how are things looking now?? You made 2014 sound like a long term rosy picture, so cattlemen, bankers, realtors and ag dealers made big investments. NOW LOOK at the suicides, depression, low cattle prices, HUGE IMPORTS that you have encouraged. You should be ashamed at your huge salaries and lobby money you receive from the Beef Checkoff and advertise imported beef and are killing the USA ag economy quickly and effectively.

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