Critical Issues for U.S. Cattle Industry

CattleFax’s Randy Blach outlines trade, consumer demand, impending corn crop situation.

Herd expansion, export markets, corn crop expectations and swine fever ramifications are among the factors that will have an effect on the upcoming U.S. cattle market, Randy Blach, CEO of CattleFax, told more than 700 attendees of the 2019 Cattle Industry Summer Business Meeting near Denver July 30, 2019. Blach was keynote speaker at the opening general session of the meeting, a gathering for leaders of the National Cattlemen’s Beef Association, Cattlemen’s Beef Board, American National CattleWomen and National Cattlemen’s Foundation.

Tyson to Rebuild Plant

Tyson Foods to rebuild Kansas beef plant and pay workers following fire.

A fire partly destroyed the Tyson Foods beef plant in Holcomb, Kan., Friday, Aug. 9. The plant will be down indefinitely; however, the company plans to rebuild the plant at the same location. Officials are still assessing the damage, so it’s too early to establish a timeline, but work to clear damage has already begun.

In the Cattle Markets

Forward contract volumes for fed cattle are less seasonal, but the total volume fluctuates through time.

Seasonally, mid-summer is a relatively quiet time at most feeder-cattle auctions. An exception are video and satellite sales, which often include feeder cattle for later delivery. In recent years sales volumes during July and August have been similar across fixed and video auction sites. For perspective, annual volume in 2018 was 10.7 million head at regular auctions and 2.0 million head at video auctions. An examination of recent prices of forward sales may give an indication of eventual cash prices and basis levels. Note that forward sales would be excluded from the CME Feeder Cattle Index.

Checkoff ROI Study

New third-party, independent study measures the impact of Cattlemen’s Beef Board activities on beef demand.

The combined benefit of all Cattlemen’s Beef Board programs is 11.91 times more valuable than their costs. That is one major finding from a recent third-party, return-on-investment study commissioned by the National Beef Checkoff Program and conducted by Harry Kaiser of Cornell University.

The Value of a Carcass

Mark McCully, CEO of the American Angus Association and former vice president of production at Certified Angus Beef LLC, explains the differences of some commonly used beef marketing terms.

End Meat Value Rises

Chuck edges out rib for total CAB value add.

As we discuss the additive nature of carcass value in terms of the entire carcass, it’s important to realize that the quality spreads — Choice-Select, Certified Angus Beef^® (CAB^®) brand-Choice, etc. — are not equal across the primals and subprimals. The middle meats capture all of the glory as ribs, strips and tenderloins are the focus of the typically higher-priced cuts. However, after the market assigns values to each of the subprimal cuts, the contribution to total carcass value may be surprising.