Markets
In the Cattle Markets: Market Implications
By Brenda Boetel, University of Wisconsin-River Falls
Seasonal beef production increases are
expected in the latter half of the year.
Although the supply increases may
be lower due to recently lower than
expected slaughter weights there will
still be year-over-year beef production
increases of 3.3 percent (down from
expectations of 3.7%). This supply
pressure will continue to put long-
term downward pressure on prices.
This increase in beef production will
be occurring simultaneously with the
increase in pork production. Export
markets have until recently absorbed
large amounts of our increased animal
protein production. Higher tariffs and
weaker demand is putting pressure
on those exports. USDA’s Economic
Research Service released its quarterly
Situation and Outlook report last
week, in which they forecast exports
of beef, pork, dairy, poultry and other
livestock products to be down $300
million in FY 2019. Beef exports are
projected down $100 million due to
lower prices, while pork is forecasted
down $300 million due to weaker
demand and retaliatory tariffs. announcements that may or may
not materialize into market changes.
Increasing/decreasing the market export
opportunities is similar to increasing/
decreasing the size of the cattle herd.
It takes a long time to increase the
number, but we can lose our markets
very quickly. The short-term excitement
over the U.S.-Mexico agreement
has worn off as people realize the
agreement isn’t finalized or ratified.
Beef trade has been supportive of
beef prices. The bigger trade concern
for cattle is the indirect effects from
decreased trade opportunities for
pork. Futures markets will react
quickly and aggressively to political Getting NAFTA finalized however would
free up trade negotiators for more
discussions with China. Beginning
those negotiations with China now
may possibly have fortuitous timing
impacts as China will start needing U.S.
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