Ag Economist Glynn Tonsor Expects Strong Market Reaction if Positive Movement Made in Trade TalksThu, 27 Jun 2019 11:08:05 CDT
It has been a challenging year for pork exports given the tariffs with Mexico as well as with China. At the same time, beef exports are starting to feel the pain from the tariff differential with other countries in Japan. Even so, beef exports have still managed to maintain a fair amount of strength domestically compared to one year ago, according to Kansas State University Extension Livestock Market Economist Dr. Glynn Tonsor.
“On the domestic front we have actually a 6 percent increase compared to the prior month (April versus March). Domestic pork demand was down 2 percent in April and chicken demand was up 10 percent. All of those are up compared to the same period in 2018 so that is good in and of itself,” Tonsor said. “But a big reason prices were so good in many ways in 2018 was the export scene. So, now I’m not so sure the demand indexes and in particular these export demand indexes for beef were way up in 2018.”
Tonsor explains that the industry has high values to compare to with April 2019’s beef index for export demand up just 1 percent compared to March and up 2 percent compared to the year before while pork demand during that same period is shown to have declined 7 percent. What Tonsor is alluding to, he says, is that in many ways there is opportunity to improve beef trade. He says given the pressure from tariffs and other factors, pork demand has been limited and he cannot help but think that has impacted the cattle market as well. He asserts that if some definite resolutions were made in getting the various trade negotiations currently on the table done - it would greatly help the meat sector.
“If we had clear clarification on trade policy - the actual terms of trade - I do anticipate the markets would react strongly if we had positive development there,” Tonsor remarked. “China is front and center on that but finalizing the deal with Canada and Mexico would allow us to kind of wrap that up and move on. There’s a fairly lengthy list of major partners on the to do list of our negotiators.”
Listen to Tonsor’s full analysis of the current beef demand situation 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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