The best profits in agricultural enterprises are coming from the beef sector right now. A major upturn in futures prices and cash markets for fed cattle touched $149.50 per hundredweight at an Iowa auction on Tuesday.
After much weakness in cash cattle markets leading up to Memorial Day this year, cash cattle trade seemed to bounce back rather strongly immediately following the holiday. Jim Robb of the Livestock Marketing Information Center told Radio Oklahoma Ag Network Farm Director Ron Hays that there are many things at play here, causing one of the more unique situations we have seen in beef markets since a similar one back in 2003, which has resulted in unseasonably robust beef demand.
?I think the nature of the market is getting clearer and clearer,? Robb remarked, calling attention to changes that have started to evolve in the markets. ?The ?swap,? what we call it – This is underpinned by the demand profile in the marketplace and the demand specifically for beef and individual beef cuts.?
Painting a picture, Robb cited as an example, an all-time record set by rib cuts this past week, after the item was featured across grocery stores and restaurants. According to Robb, that cut was put up over $100/cwt compared to March.
?That?s a strong demand indicator,? Robb noted, saying that it?s being seen both domestically and abroad, too. Robb says, there is a whole host of reasons why this trend is retaining momentum, least of which, he attributes to the fact that the market is changing. ?The marketing rate – it?s been more driven by demand and not the level of fed cattle.?
