Don Close Considers the Increase in Beef Supplies - Gives His Prediction of the MarketsTue, 26 Jul 2016 17:14:22 CDT
It was the supply of available cattle outside the feed yards in 2015 which continued to build that has increased cow numbers, claims Don Close, vice president of Food and Agribusiness Research and Advisory, Animal Protein at Rabo AgriFinance.
“Personally, I think that has been a bigger part of the supply of feeder cattle,” Close said.
Close says though that this was to be expected, taking into account that the U.S. beef industry is currently working to rebuild its herd, and says that more cattle are in the pipeline.
Close has projected that market prices may level out around $1.20, which is approximately where prices rest now. Cautiously, Close defends that his projection will be met, predicting that on average, prices should plateau around $1.20 for the third quarter.
“If that’s a quarterly average, should you expect some sub-$1.20 sales in that mix, no doubt,” Close says.
Close says that speculators are beginning to find underlying support for the futures market. He says that he believes the cattle market is at a critical juncture, but at this point still wants to give it the benefit of the doubt. The reason why, he explains is that the industry remains very current in its feedlot supplies.
Close says that if you really want to understand what the culprit is to all the disappointment in the market right now, perhaps look into the total tonnage of protein going to the consumer.
Listen to Don Close talk more on the gradual increase in beef supplies and summer cattle prices during the latest Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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