ANGUS BEEF BULLETIN EXTRA

October 26, 2018 | Vol. 11 : No. 10

Marketing


management

From NAFTA to USMCA

Canada, Mexico and the United States reach new trade agreement.

The North American free-trade pact isn’t dead after all. Up against a hard deadline Sept. 30, Canada and the United States struck a deal that should keep the tripartite trade agreement in place. NAFTA is given a makeover in both content and name — now called the United States-Mexico-Canada Agreement (USMCA).

The agreement reflects some new and some old — a combination of original North American Free Trade Agreement (NAFTA) terms that were negotiated for the defunct Trans-Pacific Partnership (TPP), and new text that addresses the complexity of global trade as it exists today.

In The Cattle Markets

Choice beef production a little tighter than a year ago.

Beef production has continued to run above a year ago throughout 2018. As usual, digging a little deeper into the numbers reveals some interesting details on type and quality of beef being produced in recent weeks and some implications for prices.

Federally inspected beef production during the last month is up 1.1% vs. the same period last year. During the same period fed-steer slaughter is down almost 2%, while heifer and cow slaughter are 4.4% and 7% higher than a year ago, respectively. So, all the increase in beef production in recent weeks is coming from heifers and cull cows.

Beef Industry Outlook

Beef demand keeps prices up amid high supplies.

The beef cow herd expansion is slowing, and supplies of commercial beef production are up. Supply increases are moderating though, says Glynn Tonsor, professor in Kansas State University’s Department of Agricultural Economics. Beef production supplies increased by 6.4% in 2016 and 3.8% in 2017. Projections include a 3.3% increase in 2018, 1.7% in 2019 and 0.8% in 2020.

Expectations in Cattle Buying

Economist shares insight into cattle-buying behaviors.

How do similar cattle get different prices in different markets? There could be many reasons, but one of the biggest, says Kansas State University ag economist Glynn Tonsor, is buyer experience. Tonsor shares research looking into cattle-buying behavior.

The Source

Develop a sound marketing plan by believing in the future.

Dream. Believe. Future.

These words are not just for graduation speeches or only for youth. Dreaming, looking to the future, and believing in yourself or an idea can help lead you to success.

Marketing Cull Cows

Wyoming cattlemen share plans for marketing cull cows.

Neal and Amanda Sorenson of Powder River Angus are fifth-generation ranchers, raising registered Angus near Spotted Horse, Wyo. Extensive culling is part of their breeding program. Neal says there are usually several marketing options for cull cows. Any cows in his herd that will calve late are culled, but they may go to another herd.

“What is late for us may not be late for someone who is calving in May, June or later. There can be a good market for those cows. We probably sell between 60 and 80 young pregnant cows each year (ages 3 to 5). There are usually people who want them because they are calving later. These cows fit their program and have a lot of years left,” Neal says.

Cull Cow Dressing Percentage

Management before sale could affect dressing percentage.

Cull cows that are destined to go to the packing house are graded by their fleshiness. The fattest cows are called “breakers.” Moderately fleshed cows are “boning utility.” Thin cows are called “leans” or “lights,” depending upon the weight of the cow. There will be price differences among these four grades.

However, within each grade, large variation in prices per hundredweight (cwt.) will exist because of differences in dressing percentage. Cow buyers are particularly aware of the proportion of the purchased live weight that eventually becomes saleable product hanging on the rail. Dressing percentage is mathematically the carcass weight divided by the live weight multiplied by 100.