Explosive Cattle Board! . . . .

[westernvicki]

http://www.beefmagazine.com/business/china-lift-13-year-beef-ban

[blackjack]

The ones not locked in 500 bucks for the good agboy .Good to see after 16s kicken

[grassfarmer]

westernvicki I think that's a "false cause". Nothing is moving to China, not going to any time soon, if ever. Same announcement was made last September and it didn't raise the market then.

No free enterprise in the beef sector ag-boy - at least beyond the farm gate. You don't get competition without less than 10 players in the packing sector and it's a long time since there has been that many. Canada has currently only 2.

The whole thing is increasingly rigged to keep cattle producers in shackles. Packers with the ability to manipulate the futures are controlling the market. Feedlots reported last fall that they couldn't access bank loans to buy calves because the packers weren't giving out spring contracts for fats. We see now that the fats that were contracted for spring have been captured at way under true market value. The market fundamentals didn't change last fall from the previous couple of years - record low cattle numbers, record high store beef price so there was no reason for a cattle price collapse. The livestock insurance program isn't really something to "protect" cattle producers prices or incomes - it's a way to set the market price for feeder cattle - again derived from the cattle futures which are being manipulated.

[errolanderson]

The major change is the deal Trump signed with China.

Game changer.

you are right westernvicki, the Trump deal appeared to be the original ignition for this cattle rally . . . .

[bucket]

Poisoned or tainted beef from Brazil had nothing to do with it?

[errolanderson]

Poisoned or tainted beef from Brazil had nothing to do with it?

good point bucket . . . China quickly allowed Brazilian beef back in their country, but certainly China has a motive in keeping the Brazilian commodity pipeline open.

[Cattleman]

The fact steer carcass weights in the US are 30 lbs below last year, and the US has been a next Exporter the last couple months, has resulted in Domestic beef supplies about flat year over year. Combine this with the fact that the number of cattle on feed 120 days + is way below a year ago has been very bullish in terms of market developments. Big driver has also been the drop in retail beef prices, and big jump in beef features has resulted in beef being pulled through the supply chain and getting the industry very current. Packers have sold ahead a lot of beef with orders to fill. The US only exports a little over 10% of its beef, I really don't think the China was a big deal. As pointed out, it was the repeat of an old announcement. I see most of the market shift as domestically driven, with help from the trade balance.

Market fundamentals are much healthier, and prices have jumped over 30%. Funny you talk of the markets being rigged Grassfarmer, after market fundamentals have changed dramatically and prices are up 30%! Why would packers let the feedlots make $600/head if markets are rigged?

Sorry, end of rant.

[grassfarmer]

Better that they give back $600 on a few than $600 on them all, so the market fixing has still worked for the packer. When prices topped out in 14/15 predictions were that they would remain high until 2020. Then mysteriously last summer/early fall the talk changed - all of the sudden US numbers had grown at a rate that wasn't possible given the speed cattle multiply at. On top of that weights had increased and demand slumped. We were warned that prices fall 16 would be bad but fall 17 would be worse. I called BS on it then and I'm calling BS on it now. There was futures manipulation and likely inventory misreporting used in a blatant attempt to collapse the live cattle market when the fundamentals didn't point to such a bleak outlook. Now the pretence has ended - inventory is still low in N. America as it was bound to be and the demand for beef is still there.
Don't get me wrong I'm not upset at the prices being back closer to where they should be - I'm upset that so many cattle producers were cheated out of income last fall. Luckily I had faith in my reading of the situation and sold nothing in the last quarter and after a long winter am selling now.

[Blaithin]

Seems every other month America is having some issue killing hundreds or thousands of cattle.

The fires in Kansas and now the blizzard in Colorado. Beats me how they come up with the numbers that their herd is stable and growing.

Seen a prediction about a drought this year in July and August for AB and SK. Might be a time to take advantage of prices for grass cattle and slim down a bit in case grass becomes short. I just hate sending calves to feedlots :/

[westernvicki]

Thank you for the summary Cattleman.

Perhaps the deal with China is not a game changer today, however the growing from China, even if painstakingly slow, will change demand in the world. Even a small % is big.

Arnold has his match in Trump.