We Have a Situation on Our Hands - Pork and Beef Working to Secure Stability in Supply ChainMon, 14 Nov 2016 17:26:38 CST
For some, the amount of product on the market both in pork and beef, seemed to have piled up rather suddenly. But in fact, it’s been mounting for some time and has more or less been expected, says Steve Meyer, meat product economist. Farm Director Ron Hays spoke with him at the recent National Association of Farm Broadcasters convention about what his outlook is for the future as both protein industries work to move product during this period of growth in both species here in the US.
“It’s been brewing for a long time,” Meyers said. “We started growing hog numbers pretty substantially last year and it’s mainly on the back of productivity. We thought the numbers were coming for some time and not a surprise to us.”
On the beef side though, Meyers tells Hays that the good moisture and grass conditions over the last couple years have encouraged the rebuilding of cattle herds, which he says fits into the cause and effect sequence of events.
“Last year though, pulling those heifers out drove markets extremely high and we’ve slowed that process down,” Meyers said, “and now we’ve got those calves coming out of that larger cow herd and we still have excellent grass conditions so we’re putting a lot of weight on these cattle before the come into the feedlots.”
Meyers attests that the beef side is stabilizing fairly well with support levels seeming to hold enough to allow feedlot operators the chance to make a little profit. On the flip side, though, he says things are not as bright for cow/calf operators who are seeing the prices they had for a short time starting to slide down. But for hogs, Meyers says there is no stability yet as packing capacity is creating constraints within the processing line.
“We think maybe the worst is over but we have really a situation right now where the price is kind of indeterminate,” Meyers said. “Packers have kind of held it in these upper $40 or $50 range and I think that’s going to continue because producers have been very aggressive in their marketings.”
According to Meyers, looking from the outside in, things feel as though they are a little stagnant, but he says if you compare all the numbers, demand and export numbers are relatively strong despite the situation and believes that slow but steady growth with continue build.
“I think there’ll be a little more stability but it’s going to be stability at a very, very low level,” Meyers said. “We’re just going to have a supply situation on our hands for some time to come here in both species.”
To listen to Hays’ full conversation with Meyers regarding the supply and demand situation affecting the pork and beef industries, click or tap the LISTEN BAR below.
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