Name calling aside, what problem are we really trying to solve? Twenty-two years of data sourced from LMIC tell a compelling story (or lack thereof) about the relationship between cash trade and producer profitability.
Speculators in the futures markets have a negative portrayal. But opposite sides of the market work in lock-step with one another - producers can’t hedge price risk without speculators on the other side.
Are speculators in CME Live cattle futures markets dominating price movement, adding to volatility and uncertainty? Nevil Speer examines the data to provide perspective.
The increased use of alternative marketing arrangements has allowed feedlots to spend less effort and energy on guessing the market – and more work dedicated to consistent throughput, Nevil Speer says.
Critics of the current fed cattle marketing system say increasing negotiated cash sales will lead to higher prices. But that assumption is not supported by data. In fact, 12 years of data suggests the inverse is true.
During the past six months, beef consumers have reinforced their preference for product at the top end of the market. Both branded and Prime products have been supported by unprecedented demand.
Consumers have access to greater differentiation and higher-quality beef products now, more than ever. As a result, beef spending has outpaced the competition since 2000. Cattle prices have risen as a result.
Proponents of COOL say the law provides an advantage to U.S. beef producers and enables them to earn higher prices. But that view doesn’t consider Canadian prices that have marched in lockstep with the U.S. market
The report issued this month by 17 ag economists, “The U.S. Beef Supply Chain: Issues and Challenges,” warns against mandating minimum cash trades for fed cattle. Nevil Speer urges producers focus on consumers.
