Don Close Says 2017 Has Been a Remarkable Year for Cattle Producer ProfitsSat, 11 Nov 2017 21:33:04 CST
According to Don Close, senior livestock economy analyst with Rabobank, the cattle markets have been remarkably profitable in all sectors of the industry here in 2017, and he contends they were set up to do so from the beginning. He explained his theory, speaking with Radio Oklahoma Ag Network Associate Farm Director Carson Horn during the National Association of Farm Broadcasters Convention in Kansas City this week.
“We started a year ago now - a lot of disappointment in calf prices and the cow/calf guy had a tough go,” Close said. “The fact that that set of cattle went into the system undervalued laid the ground work for all sectors of the industry to have a very good year in 2017.”
As a result of that, Close explains the same set of calves that were undervalued a year ago sold at substantially better prices that balanced out the initial lowball prices. As of right now, he says the industry is ending the year on very solid footing, even as the number of cattle on feed continues to swell. The fact that carcass weights are currently running about 15 lbs. below year ago levels is helping to keep a lid on total production. The way in which the market has fallen into place has proven to turn a profit for each segment of the business - and Close says there is no reason why producers shouldn’t see that momentum continue into 2018.
“As long as we can continue to see a very even flow of cattle through the system, I think it’s ok,” he said. “Certainly, with the margins that beef packers have been working with certainly through the last half of 2017 - they’ve got every incentive under the sun, to continue to see a very aggressive slaughter pace.”
Listen to Don Close review this year’s cattle market, and his predictions for this coming year, 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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