Agricultural News
What's the Beef Market's Real Worry for 2017? Rabo's Don Close Paints His Picture by the Numbers
Thu, 02 Feb 2017 11:32:49 CST
As a whole, this week's Cattle Inventory report from USDA took most people in the industry by surprise, particularly the number of replacement beef cow females - but not Don Close with Rabo AgriFinance. He told Radio Oklahoma Ag Network Farm Director Ron Hays recently that the 1 percent increase from last year in this segment, is simply just part of the reproduction life cycle that he felt was within reason to expect.
"That's probably one that I don't think should be a surprise," Close said. "I think the folks that were looking for a net contraction in that heifer replacement number were just putting the cart before the horse. There's a longer tail on that thing than a lot of people were wanting to think about."
Reading between the lines - Close says this will translate into a lot of beef coming down the pipe in 2017. The ramifications of this of course will affect the price of beef, which he expects to be confronted on the other side with an increased supply of pork on the market as two large pork production plants come online later this summer. He says his real worry lies in what's to come during this 3rd Quarter.
"I still think we will see a spring rally," he said. "High teens to the $120 level possibly for the peak of that grilling season. The real worry that we have is the 3rd quarter particularly with the fallout from the placement numbers that we saw last Friday."
Listen to Hays and Close discuss the outlook of beef production this year based on recent USDA reports, on today's 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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