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Making Profits in the Cattle Business

by Emery Kleven

Listen Here: Profit Matters 11-1-16

Making profits in the cattle business has been tougher than a two dollar steak in recent months. Don Roose, President of U.S. Commodities in West Des Moines gave us his overview of the cattle situation.

“We think it’s two steps down, one up. We just recently had the one up step. In fact, we’ve had close to a $10 rally on December cattle about 10.2% value rally in just short order,” Roose said.

Cash cattle prices last week were around $105 a hundredweight (cwt) on a live basis and on a dressed basis, the weighted average in Iowa last week was $163.51 a hundredweight. Somewhat similar to the grain trade, the cattle markets have been in a range.

The grain markets and the cattle markets have been range bound with the cattle prices at the upper end of what’s been a pretty low range.

“The grain is┬ávery much in a range bound market, one that just really is stuck because of fundamentals and technical, until we get some weather problems or some other issue that breaks us out of this range.”

Roose says the demand side of the market will be the focal point because in 2017, supplies of meat will be larger.

“Red meat and poultry will be up 3%, and that’s up 2.1% on poultry, that’s up 3.6% on beef and 3.8% on pork.”

 

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