Rabo Agrifinance’s Don Close Shares His Top Four “Unknown Unknowns” of the Beef Industry in 2019Fri, 14 Jun 2019 09:30:17 CDT
Don Close, vice president for food and agribusiness animal protein at Rabo Agrifinance, recently was the featured speaker at a briefing hosted by the National Cattlemen’s Beef Association, held to educate Congressional staffers about the cattle business. Part of that discussion included Close’ insight into the industry’s marketing efforts as it navigates the various pressures that have arisen here in 2019. Some of these pressures Close says were expected, others were a bit of a surprise – what he refers to as “unknown unknowns” in the marketplace.
“When we started 2019, we were expecting to see record production levels in all three major species. So, we knew we had a lot of meat coming at us and that we were going to be heavily dependent on sustaining an export pace to clear that tonnage of product,” Close explained. “That’s been a factor in the market from Day 1.”
Beyond those foreseen hurdles, Close says further unpredicted challenges have occurred. These include the outbreak of African Swine Fever, having severe implications on China’s swine herd (the largest in the world) and thus creating opportunity for the US to export more protein to China. The weather has also created challenges, which has seemed to have been deliberately working against farmers since this past winter and into the spring. This too has created a situation with this year’s corn crop and getting it in the ground. As of this week, the USDA lowered its reported planted acreage and expected yields. With lower production the general expectation now – potentially as much as a billion and a half bushel impact according to Close - it is likely rationing of current supplies will begin and in turn start to ratchet up the cost of feed grain.
The common thread among all these issues, Close says, is that they are all still developing situations. He contends that until the industry is able to get a better handle on these situations, uncertainty will continue to inject volatility in the marketplace.
Listen to Close’s examination of his top four “unknown unknowns” in the beef industry, 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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