After a mostly sluggish April, market-ready fed cattle saw a solid rally in the North and steady money in the South. Futures markets began to look past the psychologically bearish H5N1 virus news.
The first steps to repealing America’s country of origin labeling (COOL) laws were taken Wednesday as the House Agriculture Committee voted 38-6 in favor of a bill that would eliminate labeling requirements for beef, pork and chicken.
The U.S. has lost its final appeal with the World Trade Organization (WTO) over country of origin labeling (COOL) laws for meat products. Monday’s ruling, the fourth with the same decision from the WTO, opens the gate for Canada and Mexico to initiate trade sanctions against the U.S.
Cattle feeding margins were unchanged from the previous week, which means the train wreck continues. Despite modest gains in the cash market, cattle feeders lost an average of $206 per head, just $1 better than the previous week.
Cattle market fundamentals may remain favorable, but April’s expected rally has fizzled. Both feeder and fed cattle traded significantly lower this week, with cash fed cattle prices now $9 lower than just three weeks ago.
Cattle traders were mildly surprised by USDA’s April cattle on feed report as both placements and the total on feed numbers came in higher than expected.
Beef cutout prices trended about $2.80 per cwt. higher to $256.37, and packer margins improved more than $26 per head, resulting in losses of $15 on every animal processed.
The spring cattle market rally was beginning to bloom this week, with yearling feeder cattle trading firm to $5 higher and instances of $6 to $8 higher.
Last month, the Dietary Guidelines Advisory Committee (DGAC) issued its every-five-year attempt at encouraging Americans to eat a healthful diet. While it’s logical healthy people make for a healthy country, how best to encourage people to eat healthier remains controversial and politically-charged.
Beef packers put away the red ink last week as they turned modest profits on every animal processed. Feedyard margins, however, slipped a little further away from positive.
Traders and analysts were surprised by USDA’s 2015 Cattle Inventory Report, which suggests increases are coming to the beef supply chain sooner than expected.
As cattle prices surged this past year, profitability reached into every corner of our industry. Record-high prices were established every quarter, possibly a once-in-a-lifetime event.
As good as the cattle markets have been in 2014, next year should be even better. Even among economists, wary as they are about predicting a market rally, few hesitate to predict 2015 to be another banner year.