CattleFax Analyst Randy Blach Suspects Feeders will "Leak a Little Oil" as Record Production GrowsMon, 06 Aug 2018 13:03:25 CDT
Cattle market analyst, Randy Blach of CattleFax addressed producers during the 2018 Cattle Industry Summer Business Meeting this past week in Denver. According to him, the United States will produce 11 billion pounds of protein this year in terms of beef, pork and poultry. That is the highest level of production ever in the history of the US meat industry. What is equally remarkable, is that it is all being consumed as well.
“We’ve got record consumption in the US and more and more people around the world, as they see their incomes rise, we see the demand for protein rise right along with that,” Blach said in an interview with Radio Oklahoma Ag Network Farm Director Ron Hays.
At the same time, though, Blach also reports that the US beef cow herd expansion is beginning to show signs of an impending plateau in the rate of growth.
“We expect we’re going to see the cattle cycle top here within the next 12 to 18 months,” he said. “Between now and 2020, we should see the peak in beef cow numbers somewhere up to 32 million beef cows or a little over.”
Now, how this all impacts the market is the last question on producers’ minds. Blach is optimistic that from a cow/calf and stocker perspective, the cattle market in the foreseeable future looks fairly bright. However, for feeders, Blach is less confident that sustained profitability can be managed.
“This is going to be pretty tough for our feeding industry to make much the rest of the year,” he concluded. “We’ve been buying pretty high break-evens in here for the last several months. So, I suspect we’re going to leak a little oil there.”
Listen to the full exchange between Blach and Hays on his outlook for the cattle market, by clicking or tapping the LISTEN BAR below.
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