Boxed-Beef Trade's Surprising Performance Underpinning Current Strength in the MarketplaceWed, 10 Jul 2019 10:28:51 CDT
The third quarter of 2019 has officially arrived. Jim Robb is senior economist at the Livestock Marketing Information Center, and he indicates that all in all, the beef market is looking fairly good when compared to last year. In a recent interview, Robb reported that production and slaughter have been slightly down. The supply side, although running a bit higher more recently, has had a bit of decline. Even so, he says the boxed-beef cutout has actually held together quite well.
“In contrast to last year we’re stronger. We’re fully $9/cwt above a year ago at $9.63 on the Choice cutout which is 4.6% - so the market is kind of moving sideways on the fed cattle side and being rather supported on a year-over-year basis by the wholesale beef market,” he reported, explaining why the fact that beef cutout prices are above a year ago is so significant. “The cutout is really the key underpinning of the marketplace and then also, cattle have been marketed very aggressively. So, when you put the puzzle together, it says we’re very current in feedyards.”
Given the situation, Robb says this could potentially mean that feeders may not need to move as many cattle, perhaps even less than last year. According to him, it might actually give feedlots the opportunity to wait on prices for a little while, if they need to. Robb believes this could positively impact the market moving forward. Certainly, over the short term he says steady to possibly stronger prices should be able to be maintained over the next week or two.
“That bodes well for the market maybe being able to slightly outperform the futures for example,” Robb said. “That’s kind of what we’ve been able to do in recent weeks and we may be able to do that for several more weeks this summer. Especially if this demand profile stays as robust as it has been for some of the beef items like hamburgers and steaks.”
Listen to Robb’s full analysis of the current beef market 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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