In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays spoke with Cassandra Fish of The Beef Read about improving cattle market sentiment, resilient beef demand, tighter fed cattle supplies ahead and a new USDA daily negotiated cattle report designed to provide a more representative five-area average.
Cattle Market Shows Strength
Fish said the cattle market has worked through larger supplies that were widely anticipated in September and October, while boxed beef prices have remained relatively stable and beef demand at the retail level has continued to perform well. “We’ve done a really good job getting through these numbers,” Fish said. “We had bigger numbers. Was well advertised in September and October. Fed cattle supplies in the north, and we’ve had a stable box beef market between mostly between 370 and 380 most of the time here for several weeks.”
She also pointed to packer losses over the past several weeks and strong retail beef performance as positive signs for the industry. “So I don’t everything I just listed. I don’t I don’t find anything negative, and so the market’s kind of done what it needed to do to get through these numbers,” Fish said.
Fish said the market established a major low around Labor Day and has been trending upward for approximately seven weeks.
Tighter Fed Cattle Supplies Ahead
Looking ahead, Fish said the industry is approaching a period of tighter supplies in December. She also pointed to an upcoming cattle on feed report that could show one of the smallest placement numbers in modern history. “We’re heading into tighter supplies,” Fish said. “And we’re going to have a cattle and feed report that is going to likely have the third smallest placement number in modern history.”
Fish said the anticipated placement numbers point toward another period of tighter fed cattle supplies, adding that supply fundamentals are only part of the market outlook. “To me, though, the most important piece of all this is that beef demand continues to be stronger than expected,” Fish said. “Beef demand continues to perform very well and be very resilient, and that’s the key.”
Beef Demand Remains Resilient
Fish said strong beef demand continues to support the market, even as the industry navigates changing consumer trends and other factors affecting protein consumption.
She pointed to recent research involving GLP-1 medications and their potential influence on poultry, meat and overall protein demand. “It does continue. It does appear to be a factor, a positive factor, and kind of providing some underpinning to protein demand, and so that’s that would appear to be here to stay,” Fish said.
According to the study Fish referenced, one in six U.S. adults between the ages of 18 and 75 are taking a GLP-1 medication.
Fish said the current cattle market reflects a combination of factors the industry has not experienced together in previous generations. “It’s not your, it’s not even not your granddad’s cattle business. It’s not even the our generation,” Fish said. “We’ve never really seen all of these the confluence of all of these factors.”
New USDA Cattle Report Could Improve Market Transparency
Hays also asked Fish about a USDA reporting change announced by Agriculture Secretary Brooke Rollins. Beginning Monday, the new daily negotiated cattle report is expected to combine information from five major cattle-feeding states into a more representative five-area average.
Fish said the change could be helpful because many industry participants rely on the five-area average rather than the national average when evaluating negotiated cattle prices and packer costs.
Currently, reporting limitations related to confidentiality rules have kept Texas, Oklahoma and Kansas, along with Colorado, from being fully represented in the negotiated cattle report. “It will be very helpful because most of us in the industry rely on the five area average rather than the national average,” Fish said.
She explained that the existing five-area average has largely reflected Nebraska and Iowa in recent weeks, limiting its usefulness as a picture of the broader market. “The last few weeks the five area average is really just a Nebraska and Iowa average and that is not as we all know representative of really the costs,” Fish said.
Fish said the updated report could provide a clearer picture of negotiated cattle prices across the major feeding regions and help the industry better evaluate packer costs. “So yeah, I think it’s really a very positive development,” Fish said.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR above for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
