Sir Loin":2jx21nj9 said:
Greybeard,
Nice research and I am in total agreement.
China will get cattle one way or another.
Then the question is, how will they feed them?
A. Force the US to sell it to them.
Now the question is:
What will be the effect on our cattle industry if China forces the US to sell them, say 5 - 10% of our annual corn crop?
IMO, feed prices will rise while cattle prices are going down and marginal cattle operations ( small and hobby farmers ) will go out of business, further bringing down the US inventory of cattle.
Hence, in 10 years, I would not be surprised if only the big boys are left in the cattle business and supplying 90% of our beef.
SL
Hard to say about the little guys. It takes a heck of a lot to run cow guys out. Drought will do it, and we have sure seen our share of it in the last 5-10 years, but it still remains that the average "farm/ranch" in the US is less than or about100 acres and less than 100 hd beef cows according to USDA.
I don't think emerging markets will affect the small guys much other than increased feed prices--not that I am minimizing that. I would think it would take China @ least a couple of decades to get a big market share in beef exports, but they will be eating up any excess feed production available all that time, while demand for beef stays reasonably high both in the US and elsewhere in the modern world. One of the reasons for the slight decline we see in beef demand domestically is economics--our poor economy. Shoppers want beef, but can't justify paying $8-9 a lb for choice ribeye when $3/lb chicken is available. IF our economy really turns around, we could see a return to increased beef demand here in the US, but I just don't see the economy getting better any time soon.
Tho I see no way to prevent other nation's from buying more and more of our corn, it may be possible to tie those sales to us being able to export our beef into places like China, and producers could ride that wave till the eventuality of China becoming both completely self sufficient and being a big exporter of beef. After that--who knows?
I still believe demand in the US will remain strong with a slight increase, as well as an increase in consumer beef prices, live cattle, and slaughter cattle for the short term-3-5 years.
Once China and others take a big bite out of our available grain, production prices go up, consumer prices follow, then domestic demand slows because of higher retail prices dictated by higher production costs. Consumers have to buy gasoline no matter what it costs at the pump--they don't HAVE to buy beef.
One other darker aspect:
China has mimicked every move we have made--learned from us in every way except the thing that put us on top to begin with. WW2 put us on top for 40 years because all the rest of the world was either underdeveloped, undeveloped, or destroyed. We and Canada alone were untouched by the ravages of war and it was only after the rest of the world caught back up that we began our decline. If China holds true to the recent past, they may well take that last step as well, and try to follow the same path we did to be not the biggest dog on the porch, but the ONLY dog on the porch.
Anyway--good discussion..