On a day when grain prices are sharply lower, due to trade disputes combined with excellent crop conditions, we take a look at trade in beef. It has been exceptionally good for an extended period of time.
“Beef packers are having a record year,” concludes Jim Robb, of the Livestock Marketing Information Center. Robb spoke to Ron Hays, with the Radio Oklahoma Ag Network, about how well packers and cattle producers are doing so far in 2018.
Robb says things have actually turned out to be a little better than most might have anticipated going into the start of this year.
“2018, so far, has been a little better than anticipated in terms of cattle prices – a little bit better probably than anticipated in the wholesale meat markets supported as it was last year by really good demand,” Robb said. “That demand side has really helped us absorb rather large beef production. So, it’s turned out really pretty well and probably we put it in the category of better than anticipated.”
Robb says one unique aspect about the beef markets in 2017 was just how aggressively cattle were pulled through the pipeline. While that continues to happen some here in 2018, he relents that it just isn’t happening quite as much. However, he points out that markets were really quite aggressive during the second half of this past May, which set things up nicely going into the last USDA Cattle on Feed Report. Nonetheless, seasonal lows are still in the forecast this year for fed cattle coming up and calves later this fall. On the whole though, Robb states that the “whole boat has been floated a little higher,” injecting some optimism into the current marketplace.
What is also interesting is that for the second year in a row, carcass weights have not been increased. That, plus an impressively strong demand profile both domestically and internationally, Robb says things have come together nicely for the American beef industry.
“Look back over the last 20 years or so, we’ve added five to six pounds on a dressed weight basis every year to steer carcass weights. Now, much of that is this very aggressive marketings,” Robb said while explaining how this has positively impacted packers. “2018 is going to turn out to be our best year ever in packer returns and that’s kept them wanting to buy cows.”