MARKETING...
Feeder Cattle Price Forecast - 1/16/09
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Dillon Feuz
In the Cattle Markets
Feedlot profitability
That heading is clearly misleading; there is no profitability in feeding cattle. At least not in 2008, and now this year is not starting out much better.
The reality of the feeding industry is there is an excess capacity relative to the size of the cow herd and available supply of feeders.
The result is that to obtain sufficient cattle to run the feedlot at an economically optimal capacity, there is bidding pressure for a limited supply of feeders. Read more.
Better Markets Ahead
At the recent Nebraska Cattlemen’s Convention, market analyst Jim Robb called 2008 the worst year on record for cattle feeders. After a decade of profitability, many cow-calf producers also lost money. High grain prices and their effect on hay and pasture costs have burdened all beef industry segments, said the Livestock Marketing Information Center director.
While consumer demand for beef has stalled amid recession, supply-side events offer promise for better cattle prices. Cow-calf producers are culling more cows and retaining fewer replacement heifers. Total cow herd inventories are shrinking in the U.S., but also in Canada, Mexico, Australia and Europe. That means lower beef production worldwide, which should be supportive to cattle and beef markets.
Robb foresees better prices by 2010, but warns that markets will be volatile in the interim and beyond. He says volatility in prices of grain and other feedstuffs is embedded in the system. He predicts spikes in the corn market will continue, following fluctuations in the oil market. And the price of corn will continue to drive prices for other feedstuffs and calf and yearling markets.
Sara Snider
The Source
Carcass challenge features the best
We often focus on the records, documentation and the age-verification component of AngusSource®. Due to the requirements of the Japan export market, age verification is what we seem to read about most. Age verification is in demand by feeders, and packer premiums of up to $35 per head are available.
However, while age verification is an important component of the program, we need to remember that at the heart of AngusSource — and your profitability as a commercial producer — are the traits inherent in Angus genetics.
Read more.
Survive, Optimize and Thrive
We have a tendency to feel that economics is just what happens to us and there is nothing we can do about it. However, starting the year with a proactive economic plan and three levels of consideration could help producers endure hard times in the short run and prosper long-term. Read more.
Brent Eicher
CAB Corner
2020 foresight
Last fall, the downturn in the stock market caused some people to worry, especially if they had a retirement account such as a 401(k). For a cattleman, that combination of three numerals and a letter could represent one of your cows born at the turn of the century. You may also have a 402K and a 403K, just past their prime but mothers of a few generations of replacements. Can your herd continue to grow?
No matter whether you use your herd or Wall Street investments to build equity, the unsettled economy in the recent past made you take stock of decisions over the years and look closely at the future. Read more.
USDA Market News
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Resources for Niche Markets
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