MARKETING...
Predicting Fed-Cattle Prices
Fig. 1: Weighted average beef cutout plus drop value vs. fed-cattle price, 1998-2009
Click on graph to see larger version
Authors of The Daily Livestock Report, Steve Meyer and Len Steiner explain the correlation between market prices and cutout, byproduct values.
What is the best predictor of the prices for fed cattle or market hogs? There is no better predictor of one day's price than the previous day's price. But another good one is the sum of the cutout value and drop (byproduct) value for the respective species. As Figs. 1 and 2 show, the cutout value plus drop value is highly correlated to the price of the marketed animal (live cattle and carcass hogs) for both species during the past 12 years.
As a refresher — the cutout value is the weighted average value of all of the cuts from an animal's carcass. The price of each cut is multiplied by the proportion of the carcass that the cut represents, and the resulting values are summed to arrive at the cutout value. Cut prices are updated daily for beef and as often as they are traded and reported for pork. Beef prices are reported every day they are traded since wholesale beef price reporting is mandatory. Click here to read more.
Darrell Mark
In the Cattle Markets
Non-commercials are heavily long.
The Commodity Futures Trading Commission (CFTC) was formed in 1974 as an independent agency to regulate U.S. futures markets and to, among other things, foster open, competitive and financially sound futures markets. As part of its mission, each week the CFTC issues its "Commitment of Traders (COT)" Report that provides detail as to which traders are holding long or short positions in a particular market. Let's look at how those positions might serve as indicators of future prices. Click here to read more.
Quality Cast
Dollars and sense from the Brand that Pays®.
Each month, hear from the folks at Certified Angus Beef LLC (CAB) about the latest news from across the spectrum of the company's divisions.
This month, host Laura Nelson visits with rancher Steve Olson and Chef Peter Vauthy during the Food Network South Beach Wine & Food Festival, one of the premier culinary events in the nation.
Olson and his wife, Ginger, joined the CAB team in Miami to take in some of the festivities and to interact with consumers and chefs who serve and enjoy CAB brand products. Vauthy is executive chef of Red, the Steakhouse, in Cleveland, Ohio, and Miami, Fla. Click here to listen.
Click here to read a CAB news release about the event.
Sara Snider
The Source
How to enroll in Gateway
With all of the late snow we got this year, it is hard to believe that spring is right around the corner. Along with the warmer weather comes a flurry of activity for AngusSource.® March is the beginning of our busy season, as producers begin to think ahead toward marketing their spring calves. Last year more than 17% of the cattle enrolled in AngusSource were enrolled during the month of March.
We know producers are working hard to add value to their calves while cutting out unnecessary expenses. AngusSource and Gateway are two of the lowest-cost verification options in the industry.
As you contemplate enrolling your calves into a source- and age-verification program, it is important to have all the information available to consider. We hope the information in this month's "The Source" will serve as a handy reference to answer most of the questions you have been asking yourself. Click here for more.
A Cattlemen's Day Look at the Markets
Ag economist outlines market trends, considerations for beef industry.
With recent downsizing in the U.S. cattle industry linked to a lack of profitability, ag economist Glynn Tonsor encouraged beef producers to heed recent data indicating why demand has softened and how it might be improved.
"The weak U.S. economy has hurt beef demand over recent quarters," said Tonsor, who spoke March 5 at Kansas State University's 2010 Cattlemen's Day. Tonsor is currently on faculty at Michigan State University, but will join K-State's faculty in April. Click here to read more.
Striking Gold
Marketing program brings identity to New Mexico's best calves
The New Mexico Gold Calf Marketing Program ensures that calves in the state meet the highest standards in health and nutrition programs.
A group of New Mexico bull producers is optimistic a new calf marketing program will add more value to New Mexico calves — an important process as premiums for calves has become increasingly competitive with the vertical integration the beef industry is experiencing from the ranch to the retail market.
"For years, producers throughout New Mexico have annually invested in numerous management practices with hopes of improving the value of their calves," said Manny Encinias, a beef cattle specialist with New Mexico State University's Cooperative Extension Service.
But, according to Encinias, simply implementing value-added management practices alone is not the secret to achieving premium prices for calves. Click here to read more.
Angus Calendar
To view the Angus Calendar, a complete list of
Angus sales, click here.