December 20, 2018 | Vol. 11 : No. 12
Continued growth in U.S. beef production will keep the focus on beef demand in 2019. Beef production is slowing, but is forecast to increase 1.5%-2.0% year over year in 2019 to 27.5 billion pounds (lb.). This follows a projected 3.3% year-over-year increase in 2018 beef production to a record level of 27.0 billion lb.
Mexico historically has been an important source of feeder cattle for U.S. cattlemen, with feeder-calf imports of approximately 1 million head a year since the mid-1980s. Imports grew from 702,000 head in 2008 to their peak in 2012 at 1.44 million head.
The largest portion of Mexican cattle imports typically enter the United States as feeder calves between 200 and 700 pounds (lb.). Lightweight calves are backgrounded to gain additional weight before entering U.S. feedlots. These Mexican feeder cattle contribute to cattle-on-feed placements at varying amounts throughout the year.
On Nov. 30 the leaders of the United States, Mexico and Canada signed the U.S.-Mexico-Canada Agreement (USMCA) on the sidelines of the G-20 meeting in Argentina. The USMCA maintains unrestricted, duty-free trade for beef and cattle in North America. It also maintains science-based trade standards.
All three countries must complete their own domestic processes before the USMCA comes into force. In the United States, Congress will need to pass legislation to implement the deal. The U.S. International Trade Commission is currently conducting an investigation into the likely impacts of USMCA.
Beef was a hot commodity in Lancaster, Pa., at the area’s premier food festival, attracting consumers who enjoy the pleasures of eating and entertaining with food. The Taste! Lancaster Festival of Food, Wine & Spirits 2018 welcomed nearly 8,000 guests to the Lancaster Convention Center Nov. 16-17.
How can you make marketing a priority without blowing up your budget or bank account?
One way is to always look for the best deal. AngusSource® now offers every cattle producer the option to enroll their calves in a USDA Process Verified Program (PVP). This year AngusSource added four programs and updated the original program. Today, everyone, no matter what breed of beef cattle you own, can enroll your calves in AngusSource. We updated our original program by removing the genetic component. In addition we added Non-Hormone-Treated Cattle (NHTC), AngusSource Never-Ever 3 (AS-NE3), AngusSource Cattle Care and Handling (AS-CCH) and AngusSource Calf Management (AS-CM).
The second half of December marks the end of the holiday run on middle meats, along with seasonally wider price spreads between quality grades and the premium brands. We can classify demand spikes for the more richly marbled carcasses relatively easily by the four quarters of the year, as those demand periods happen to fall nicely within the quarterly calendar segments.
Continuing the seasonality theme, let’s take a look at the cull cow and bred cow markets as of late. Much discussion has been had about the fed-cattle packing capacity being utilized beyond the limits of a 40-hour work week and the leverage this gives to packers regarding price.
The same phenomenon holds sway within the nation’s cow harvest facilities. Herd expansion has increased total beef cow numbers while continued drought and drier-than-normal conditions in the West sent more cows to town this fall, on top of summer liquidation in Missouri and eastern Kansas.
