MARKETING...
Hello Fresh Beef Tour
New York executives tour registered Angus ranch.
The consumer’s path to purchase beef is looking more and more diverse every day. Not only can consumers choose to shop at their traditional brick-and-mortar grocery store, they can also shop at Internet-based grocers or opt for complete dinner solutions from companies like Hello Fresh, an online meal-kit delivery service.
Hello Fresh ships boxes of refrigerated ingredients and recipes to customers who prepare and cook the meals themselves. A large portion of their customer base is in the Northeast, where approximately a quarter of the nation’s population lives. Read more.
In The Cattle Markets
Latest USDA supply and demand estimates lower U.S. beef production.
The USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE) report Sept. 12, which should prove to be neutral to slightly bullish. U.S. beef production for 2017 was lowered by 140 million pounds (lb.), from 26.699 billion lb. to 26.559 billion lb., while 2018 production was lowered by 85 million lb. to 27.275 billion lb. There are likely a few things driving this reduction in beef production.
One driver is lower-than-expected fed-cattle marketing as reflected in the last Cattle on Feed report, although we know those cattle are still out there and will end up coming to market at some point in the future. For many of those cattle, it is more of a matter of when they go to market rather than if they will go to market. Probably the biggest driver is reduced slaughter weights. Total slaughter numbers have been trending at or above last year’s numbers most of the year, however slaughter weights have been trending well below year-ago levels. When those two are put together, the lower slaughter weights outweigh the increase in the number of head, leading to lower production numbers. Read more.
Understanding Feeder-cattle Price Slides
Slides can have many uses in marketing cattle.
Feeder-cattle prices depend on the weight of the cattle, with lightweight cattle typically having the highest price per pound (or hundredweight) and lower prices for heavier cattle. Not only do prices vary across cattle weights, but the size of the price adjustment depends on the weight of the cattle. Price slides are a measure of the amount of price adjustment as weight changes from a base weight.
Price slides have a number of uses, the most common of which is adjusting the price of forward-contracted cattle if actual weight is different from the specified base weight. Price slides are also useful for producers to evaluate price changes for the weight gain of calves in a preconditioning or short backgrounding program, or perhaps the additional weight from creep-feeding calves. Read more.
Ag Prospects Looking Up
Slow but sure improvement in rural economy.
It might not feel like a quick ascent, but agriculture will climb out of the slump affecting nearly all sectors in recent years.
That ray of hope comes from AgResource Co. President Dan Basse, who in August spoke as part of the Feeding Quality Forum in Omaha, Neb., while colleague Ben Buckner addressed the crowd with a similar message in Garden City, Kan.
“Dairy is the only industry this year that will make more gross than the year before,” Basse said, noting it is up $40 billion, compared to the beef sector, which will drop $7 or $8 billion.
“Our revenues have fallen in half. Name me another industry where net revenues have declined by 50% in a period of five years. That’s our story,” he said.
Cyclical trends and export prospects provide a glimmer. Read more.
Ginette Gottswiller
The Source
We are off like a herd of turtles …
Have you ever been to a turtle race? It can sure test your patience. It is always fun and a great way to get to know people who are standing beside you. It reminds me of a recent wedding. The wife was gluing on her fingernails, talking on the phone and trying to decide which piece of jewelry would look best with her outfit. Her son was getting married, and time was ticking. Her husband said it was time to go and out the door he went. One friend grabbed the wife’s phone, the other grabbed a bag for the jewelry and nails. She was herded to the truck.
There are some cattlemen who move as fast as a turtle when they try to decide how and when to market their calf crops. Sometimes their reps, wives or bankers may think they are herding a turtle, too. A producer may not know his breakeven. This makes it difficult to know the price he has to meet. He may bump around and change directions with his marketing every year.
While a turtle can cover lots of ground, it helps if you travel the shortest path. Buying registered Angus bulls and using the tools (like AngusSource®) the American Angus Association has for commercial producers can be a quick, low-cost way to tell your Angus-sired calves from the other black-hided calves selling from the sale block. Read more.
Operating Committee Approves
FY 2018 Plan of Work
Cattlemen’s Beef Board sets $40.9 million budget.
The Cattlemen’s Beef Promotion and Research Board (CBB) will invest about $38 million into programs of beef promotion, research, consumer information, industry information, foreign marketing and producer communications during fiscal year (FY) 2018, subject to USDA approval.
In action at the end of its Sept. 12-13 meeting in Denver, Colo., the Operating Committee approved checkoff funding for a total of 14 “authorization requests” — or proposals — brought by seven contractors for the fiscal year beginning Oct. 1, 2017. The committee, which includes 10 producers from the Beef Board and 10 members from the Federation of State Beef Councils, also recommended full Beef Board approval of a budget amendment to reflect the split of funding between budget categories affected by their decisions. Read more.
NAFTA Negotiators:
Do No Harm to Agriculture, Please
NAFTA renegotiations could mean modernization but could open the door to problems for agriculture.
North American Free Trade Agreement (NAFTA) renegotiations are under way. With Rounds 1 and 2 already in the books, the goal is to finalize the agreement by the year’s end. Many in agriculture, especially the American Farm Bureau Federation (AFBF), the Canadian Federation of Agriculture (CFA) and Mexico’s Consejo Nacional Agropecuario (CNA), believe NAFTA has exponentially grown reciprocal trade between the three countries. Read more.
Angus Calendar
To view the Angus Calendar, a comprehensive list of Angus sales, click here.