The cattle market has been dynamic over the last couple of weeks. Consumers have been hoarding meat due to COVID-19 while the futures and cash prices are not necessarily reflecting it.
Michigan is under a stay-at-home order in an effort to fight the coronavirus. However, farm work must go on and it is business as usual for many operations.
Wednesday on AgriTalk ATBl, Don Close from Rabo AgriFinance talked with host Chip Flory about the demand side of the cattle and beef markets. He explained new trends in U.S. dining are helping to support beef demand.
Tuesday on AgriTalk ATB, Scott Varilek from Kooima & Kaemingk Commodities in Sioux Center, Iowa, told host Chip Flory that the structure of the cattle market is providing plenty of incentive to keep marketings current.
Strong prices are being reflected in strong cattle demand, and to Chip Nellinger of Blue Reef Agri-Marketing, the feedlots have the upper hand, while the packers are short bought.
While corn, soybeans and wheat have seen some slight rallies in the last few years, prices have stayed relatively low. Record- or near record-breaking crops year after year hasn’t been much help to the price picture.
Prices were higher for all classes of cattle for the week ended Oct. 13, with cash fed cattle trading at $111 per cwt., $2 higher. Cattle sold on a dressed basis at $175 per cwt., $2 to $3 higher.
Following two days of falling cattle futures prices, Joe Vaclavik, president of Standard Grain, is calling the market moves a knee-jerk reaction to the latest Cattle on Feed report from the USDA.
The U.S. Meat Export Federation (USMEF) said Japan is continuing to buy U.S. beef. Exports to the island country continued to gain momentum in June, with volume up 7 percent and value up 13 percent compared to 2016.
Drought and dryness in the northern Plains hasn’t been enough to stop cattle growth, according to the mid-year cattle inventory numbers from the U.S. Department of Agriculture (USDA).
Wild weather in the Corn Belt in the beginning of the month flooded freshly planted fields and dumped inches of snow on Kansas wheat. Farmers were expecting to see a bump in prices, but failed to see any reaction in the markets.
The cattle market has been pretty interesting as of late. Elaine Kub, author of “Mastering the Grain Markets” discusses the fundamentals behind the recent strengthening of the cattle market.
It’s no secret there’s too much meat on the market. Cattle have bounced from the previous lows is because of a tight supply for the next 30 days.
Between realizing crop shortfalls in South America, a weaker dollar and weather uncertainties, prices for the month of April are up 35 cents for corn to near $4 for corn and $1.10 higher in soybeans back above $10. But the benefit for grain farmers is making it more expensive for cattle feeders.
“I have never seen livestock and grains in my lifetime as negative as they are right now,” said Jerry Gulke, president of the Gulke Group in Chicago and a farmer in Illinois, speaking with Farm Journal Radio after the report.