February 20, 2019 | Vol. 12 : No. 2


Still in a Cycle

Industry expected to remain profitable with strong markets.

The U.S. beef industry continues to experience the return to historical market cycles, according to CattleFax CEO Randy Blach, who provided a big-picture view and long-term trend outlook during the 2019 Cattle Industry Convention & NCBA Trade Show in New Orleans Jan. 30-Feb. 1.

“Our pipeline is full,” he said. “We’ve been running our packing plants at full capacity. Our feedyards are full. Our cow herd is up 3 million head, as well.”

In The Cattle Markets

Feeder-cattle prices discounted to fed.

Fed cattle and boxed-beef cutout values entered 2019 and have stayed at levels similar to or better than last year. Fed-cattle prices are about $124 vs. last year being close to $126 at this time, meaning this year’s prices are about 2% weaker. The cutout value is currently close to $217 vs. $209 last year, so the cutout value is 4% stronger. Federally inspected slaughter is up better than 5% compared to last year, when slaughter weights appear to have been off almost a percentage point.

Economy, Energy and Feedstuffs Outlook

Export demand plays role in feedstuffs outlook.

Despite the fact the government shutdown negatively affected the gross domestic product (GDP) by anywhere from 0.13% to 0.25% each week, the overall U.S. economy strengthened by about 2.8% in the fourth quarter. Unemployment rates are down again by 4%, and median household income has grown for the fifth year in a row, this year by about 2%. Mike Murphy, CattleFax market analyst, presented an outlook of the economy, energy and feedstuffs to attendees of the 2019 Cattle industry Convention & NCBA Trade Show in New Orleans, La.

Supply & Demand

Cattle market continues on an upward trajectory based on weather market.

It’s a weather-market year. During the 2019 Cattle Industry Convention in New Orleans, La., CattleFax senior analyst Kevin Good said this will make the cattle market explosive in the spring and risky in the later summer months. Much like last year, his overall outlook for 2019 is positive, despite past and future challenges in the industry.

The Source

Inspiration from Dante’s Inferno.

Dante’s Inferno and nine circles of hell was my son’s assignment this past week during the cold snap. We compared the icy lake to the icy road and how the cattle were suspended in the lake. The combination of classic literature meets millennial farmer made for some interesting conversation.

Forces That Will Shape the U.S. Rural Economy

Confluence of key factors suggest downside economic risk.

The U.S. economy is still performing well by most key measures. However, consumers, investors, companies and other market participants have become more wary about the near-term future with seemingly good reason. Global and U.S. economic prospects are weakening, and the ag economy shows few signs of an imminent comeback, according to a 2019 outlook report from CoBank’s Knowledge Exchange Division.

Of Butchery and Meatcraft

Charleston’s McBeath aims to prepare the best beef.

At a meat purveyor’s dock in New York’s bustling Bronx, a pallet moves by forklift into a southbound refrigerated truck. Eight days and many deliveries later, in a Charleston, S.C., back alley, Dave McBeath will be there with ready arms.

For a short time, contents of that pallet will be his to sculpt and prepare before seeing it off to a final delivery when a chef will apply finishing touches and customers will enjoy delicious, healthy meals.