Demand for beef is quite high. Feedlots are selling animals as quickly as they grade. However, the politics of trade may impact pork as the largest buyer, Mexico, has put 20% tariffs on most fresh product. What does this all mean for prices?
AUDIO: Profit Matters 6-8-18
Jim Robb, of the Livestock Marketing Information Center, spoke to Radio Oklahoma Ag Network farm director Ron Hays. Robb says demand continues to look pretty good as he takes the last few days of May and first few days of June into consideration.
?The drivers in the market are clearly the robust demand,? Robb said. ?We had the boxed beef cut-outs slightly weak last week. But for the holiday shortened week, we had very good movement during the week. So in other words, we had almost five or six days worth of movement in the holiday shortened week.?
Robb says this is good news. He reports even though wholesale markets were slightly softer in recent days past, prices are still higher than they were during the first week of May. A sign of ?pretty good? strength in the marketplace.
With that being the case, Robb says packer margins continue to be very strong, which in effect continues to pull cattle through the marketing chain at a very aggressive pace. The one wild card that could throw a wrench in the works is the uncertainty of trade access being heavily influenced currently by political rhetoric.
The United States? North American Free Trade Agreement (NAFTA) partners have each responded with threats of retaliation to President Trump?s decision to move forward on the implementation of steel and aluminum imports. Robb says that while Canada?s actions, so far, have no real impact on beef markets, Mexico?s do. As the largest customer of U.S. pork products, which is where Mexico has focused its retaliatory attack, any harm done to the beef industry will most likely be indirect.
?The bigger story has been in the short-term with respect to Mexico. Mexico is placing very large tariffs on U.S. pork products, so the beef impacts will be mostly indirect,? Robb said. ?What?s not sold to Mexico, we have to consume here in the United States.?
