Fed steers and heifers, the animals that become great choice steak, roasts and hamburger, are more stable than the world around them.
Traders are surprised that the growing number of cattle in the United States, especially the full feedlots, have not pushed the fed cattle price lower. Some answers as to why this market has remained strong are provided in the program below.
AUDIO: Profit Matters 4-18-18
Jim Robb, of the Livestock Market Information Center, says it is uplifting to see that despite all the turmoil in today’s marketplace, the livestock and meat markets are sailing along relatively unphased.
Robb reviewed the latest World Agriculture Supply and Demand Estimates (WASDE) report, out last week from the United States Department of Agriculture (USDA), in a recent interview with Radio Oklahoma Network farm director Ron Hays. He says the showed only small changes, if any at all, to the agency’s forecasts for the year.
“On the meat market side, the adjustments were rather minor, less than one percent,” Robb said. “Some people tried to make news out of that, but those were really in line with expectations. I think a bit of the key of the report, from a broad livestock perspective, is the trade numbers from USDA.”
Robb says many in the industry have worried that potential tariffs might disrupt what has been a relatively strong export market this year. Again, the numbers in this report showed little change to prior expectations, although there was some reshuffling of the numbers.
While export forecasts were slightly lowered for the current market aggressor, China, forecasts for other markets were raised – offsetting the losses to China. Overall, Robb says the meat markets are managing to skirt around the impacts of geopolitical concerns.
This is particularly good news, given the other major concern Robb shares with the rest of the industry, which whether or not, cattle are being backed up in the feedlots due to oversupply and increased production in the pipeline this year. But that is clearly not the case. Robb says one must only look at the current dressed weights of steers, which are up above a year ago by 10 pounds with no sign of abnormal changes to the seasonal patterns. Robb says everything is in on track and moving ahead, “steady as she goes.”