Market Indicators

[HDRider]

The total number of beef cattle and calves in the U.S. on January 1, 2013, was 89.3 million head, down 1.6% from 2012 and 7.5% lower than at the last cyclical peak in 2007. This is the smallest January cattle inventory since 1952. Calf Crop. vs. The U.S. cattle herd expanded in 2014 for the first time in eight years, offering hope to consumers that beef prices could start to subside after soaring to a series of records.

Cattle inventory (as of Jan 1, 2015): 89.9 million, up 1% from Jan. 2014. - See more at: http://www.beefusa.org/beefindustrystat ... NzZeB.dpuf

The U.S. government is lifting a 14-year ban on Argentine beef. - "This is the first step of a process for these regions to gain access to the U.S. market for beef. Brazil and Argentina also need to meet food safety standards prior to being able to export any beef to the United States," the USDA said in its June 29 statement. "Argentina hasn't accepted any beef exports from the U.S. since 2003 because of a mad cow disease case. That market has been closed to us for almost 12 years."

US Beef exports are were up 248% in 2014 compared to 2002.

Value of U.S. beef exports: $5.711 billion (2013), up from $3.839 billion in 2010 - Top export markets: Japan, Canada, Mexico and South Korea

Beef imports in 2000 were 3m #s, about the same in 2014, almost 2m # YTD at the end of July 2015.

 

[HDRider]

A ton of data at http://www.ers.usda.gov/data-products/l ... -data.aspx

What other indicators do you look and and what interpretations can you offer?

 

[HDRider]

Live cattle futures fall daily limit on signs of weaker beef demand
By Kelsey Gee
MARKETWATCH — 12 MINUTES AGO

Though some traders have been hopeful the sharp drop in beef prices would spark bargain hunting, the U.S. Department of Agriculture reported another decline Monday afternoon, refocusing attention on the fact that retailers are balking at the steep cost of beef relative to cheaper meats like pork and poultry. Wholesale-beef prices have fallen over $30 per hundred weight since the start of the month, dropping around $15 in the past five days alone.

This has contributed to wide swings in the cattle market, with futures climbing or sliding by the exchange-imposed limit during three of the last five sessions.

"There's a lot of fear that's come back into this market," said Tyler Keeling, analyst with Amarillo Brokerage in Texas.

 

[HDRider]

I am flummoxed. Normally threads get some input. This one has not.

I am trying real hard to understand beef prices, and market drivers. Many have asked where others think prices are going. I, myself have a keen interest in that subject. My guess is most on here do.

I am curious why none have come forward with three or four data points they consider as indicators to future prices.

 

[M-5]

HD I think most have an opinion but with the uncertainty of the markets its a WAG. I think its just a correction and over the long haul it will be fine. I still stick to my original assumption that the prices were driven up because of every tom , dick and harry wanted to be in the cow business. they created a demand far above what was forecasted and now that the prices have retreated they are sitting on their hands and trying to figure out what to do.

 

[talltimber]

I am flummoxed. Normally threads get some input. This one has not.

I am trying real hard to understand beef prices, and market drivers. Many have asked where others think prices are going. I, myself have a keen interest in that subject. My guess is most on here do.

I am curious why none have come forward with three or four data points they consider as indicators to future prices.

I am not smart enough to figure it out, much less tell someone else what it's gonna do. I had took a chance back in May in backgrounding my own calves, the price at the time was falling here a little. I was looking for a bump in Aug like the old timers say comes every year, never came. I had looked back in May at the feeder futures for 750's for Aug, it was at 2.40. I figured home run, or as close as I'll ever get to one probably. At least a good pay off for the amount of time I spent with them. Kept them til last week waiting on the bump to come, never came. The 2.40 never came. I'm glad I sold last week and got my feed bill back over what they were worth in May.

Nobody needs my thoughts.

 

[Bigfoot]

I think the average person here (me included), is going to raise cattle if they are up or down. It's what we do. I'd like to know what the market is going to do. I like to see what the experts say. I've resolved myself to the fact years ago, that most experts opinions are only valued by the experts themselves. I thought prices would drop. I never dream t, they would fall, this far as fast as they did.

 

[M-5]

I run a MULTI million dollar business. The company I work for gives me all to tools to be successful and I have guidelines but the owners of the company give me the freewill to run this business just like I own it. I get paid (very well ) for profit. I deal will commodity issues and price fluctuations daily. Its just a different type. The basic principle is the same. control your inputs and sell for the most profit. there are times when I make all the profit I can and others I break even. nothing is ever going to change that you have to look at the big picture. what a lot of people get lost in is todays price. We in agriculture should have this figured out by now. because we apply the answer to preparing for winter every year with hay or stock piling. You put up hay to survive the winter. the same should apply to cash when prices are high. People that operate on a worst case scenario tend not to sweat this type of drama.

 

[HDRider]

M-5 I think you and BF are saying the same thing in your own way.

To be honest that is the answer I expected, and respect. I just did not want to assume too much or put words in any body's mouth.

That said, if anyone wants to share their recipe for a secret sauce, I'm all ears.

Thanks.

 

[jltrent]

A 32% increase in imports has some to do with the lower prices.

http://www.cattlenetwork.com/news/marke ... e-producer

 

[Douglas]

^ I disagree, as does that article you posted. Imports have increase as the dollar has gotten stronger. but it went from something like 12% of total beef supply to 14% and that has not happened just this month, that has been going on a while now.

There is a panic out there in market right now driven by fear. The supply and demand numbers haven't changed much.

 

[Sd1030]

Douglas could you explain your thoughts. I think i understand your first point that a 2% increase wouldnt affect prices as much as they have. What im confused about is the fact you state supply and demand hasnt changed but instead its a fear in the market. Im not disputing with you but i dont understand why theres a fear in the market but the supply/demand is still the same. This is a interesting topic to discuss.

 

[sim.-ang.king]

Two words, interest rates.
Feds can't make up their mind.

 

[bball]

Its a global market. Someone recently posted a great article about SA beef production and its implications, then an article about China, etc etc. I try to read as much as i can on the worldwide picture and how it impacts beef. I think sometimes as an American, i get short sighted and only focus on whats going on here, instead of the BIG picture. I fear our beef industry is in great danger of going the way of so many of our other great industries....handed over to some third world countries because they can do it cheaper with less regulations, and quality usually suffers. I hope im wrong, but my gut and my eyes tell me different. I do believe in a ten year beef cycle, and try to watch and abide accordingly. I follow the CME, use it as a gauge. I also place a lot of stock in what the older generations have to say, simply because they have seen more cycles, seen more unusual circumstances, have ideas to offer during the unusual circumstances, have the time to read, research, and attend clinics that i cant, and generally shoot it to you straight (presuming you got skin thick enough to take it) and finally, they usually have some humor, which is vital to all of this.




The long and short of it for me is, listen a lot more than i speak. Do what homework you can. Take a deal when you can get one.

 

[HDRider]

CME

Learned something.

http://www.cmegroup.com

Chicago Mercantile Exchange.

Some of you forget. When you know nothing, learning is easy. It's all new.

 

[Bigfoot]

It's good to check the futures everyday, and all your local reports to of course.

 

[tnwalkingred]

http://economics.ag.utk.edu/lstockcomm.html

I don't know a lot about the futures market nor the stock market so many of the articles published don't make much sense to me. It would be nice if there were outlook reports written that would give the common producer an idea of where this market was headed and what factors play into the prices. The article posted above is about as close to one of those as I've seen lately. Their take on it is that there are just too many fat cattle still on feed and prices will not recover until this corrected. Now maybe it's because exports are down, imports are up,demand is down, or whatever else is causing feedlots to hold cattle but to the cow/calf producer our only hope is that this gets corrected and soon. I personally plan to hold my weaned calves off the market until prices recover. Grain is relatively cheap and I have plenty of hay to get me through the winter. If I can keep my input costs to a minimum then even if the market doesn't recover like we hope the bigger calves will bring a better gross price. We will have to be smart and work hard to turn a higher gross margin into increased net margin.


KW

 

[ram]

I'm figuring on doing the same thing with our calves. And I'm sure quite a few other folks are planning on doing the same thing also. And if the market is still weak I'm going to breed the heifers and sell them private treaty or just keep them.
We need a feedlot in Georgia, we have a good packing plant already. It makes no sense to truck calves west and then the meat back.

 

[Williamsv]

I have decided to do the same thing with mine. I have plenty of hay. Rye grass was sowed today. If the rain doesn't wash all the seed away, we should have plenty of winter grazing. We will sow one more big field a little later.
I think I will keep my heifers and breed them and sell from farm. I have some pretty ones now that I saved last spring, but are not old enough to breed yet. What I do not sell I will keep.
I was planning to sell around 15 in December, but not at the prices I saw them bringing yesterday.
I am thankful that I don't have to depend on the sale of calves for a living. I feel sorry for the farmers who do. Looks like something always comes up to cause a loss. Right now peanuts are plowed up all over the county and heavy rains coming on them every day. I pray things will soon get better for everyone.

 

[ram]

I was kinda shocked to see all the peanuts turned up myself. I have hay that's 5 weeks old and is needing to be cut. But I'm sure not cutting it down with the weather forecast I've been seeing. We sold out of heifers this year and hopefully the same will be true next spring.