Glynn Tonsor Reads Between the Lines of Current Beef Market Data that Shows Underlying DemandTue, 31 Oct 2017 12:06:43 CDT
Here at the end of October, beef cattle prices have managed to endure the typical seasonal pattern of decline, still maintaining above $1 per pound in cash cattle trade. In addition, wholesale boxed beef prices have also held strong, as have feeder and stocker cattle prices - all still above year ago levels. According to Extension Livestock Market Economist Dr. Glynn Tonsor, given the fact that bigger beef supplies are rolling through the pipeline currently, these price levels suggest there is significant demand for beef in the marketplace.
“Those demand signals are coming in many ways,” Tonsor said, quoting some of the increased prices currently being observed in the beef cut-outs. “You have those choice cut-outs come up… that allows us to pay more for feeder cattle, which in turn allows us to give more staying power and higher prices for those feeder cattle.”
According to his latest projections, Tonsor says he believes the rest of 2017 and the beginning of 2018 will have positive close outs. He points to a report that does not always get the attention it deserves. He says of the Cold Storage report, that some may say that shows meat stacking up and unable to find a home. But he says put into context, one realizes that the beef industry is growing and therefor will obviously manifest as more beef in storage - but the fact is, looking at stored beef as a percentage of total production, those wares are actually decreasing.
“So, it all circles back to wholesale beef, fed cattle, live cattle, feeder cattle - all are higher than we thought they’d be and that’s at a time when supplies are up,” he said. “That only happens when you have strong demand.”
Listen to Glynn Tonsor analyze the current state of the beef market and how that translates into a sign of strong consumer demand, with Radio Oklahoma Ag Network Farm Director Ron Hays, 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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