Tue, 13 Sep 2022 09:44:41 CDT
Senior Farm and Ranch Broadcaster, Ron Hays, is visiting with Kansas State University’s Extension Livestock Market Economist, Dr. Glynn Tonsor, talking about the latest market analysis in the beef industry.
Tonsor indicates a fairly stable week of markets last week as far as the slaughter cattle markets and the feeder cattle markets are concerned. Wholesale boxed beef trade, he said, is just a tad cheaper than the week before.
“Friday, USDA called the choice market at $2.57,” Tonsor said. “It was off about two dollars, and they called select at $2.36, off about three dollars from the week before. So just a little bit of weakness there.”
Tonsor said the July beef export numbers came in, topping a billion dollars again.
“I am highlighting that because there still continues to be some export demand strength and even though we have some gray clouds on the horizon there, I continue to be amazed by how strong that is,” Tonsor said. “That is one of the reasons I think these cutout values have stayed up, despite the fact that we still have year-to-date production volumes that are higher than last year.”
About those export numbers out, Dan Halstrom, president and CEO of the U.S. Meat Export Federation says it is key to note that it is not just volume, but value of our beef exports continuing to rise.
“Of course, the volumes being up are always a good thing in July and for the year, but the real selling point is the value is increasing,” Halstrom said. “We are at just about 473 dollars a head for the month of July, which is up 47 dollars a head versus a year ago. So, the volumes are increasing, but the value is also going up. We sit here and wonder with prices going up how long will it last and think the answer so far is it is still strong. It is into Asia and also Latin America, so hopefully, that will continue to be the case later this year.”
As for the processing volumes, Tonsor says the number is up from last year.
“Remember we have Labor Day effects in this as well, so the overall number is going to be a little lower, but the initial estimates through Saturday were 604,000 head,” Tonsor said. “That is up from about 579,000 the same week from the year before.”
Year-to-date, Tonsor said we have harvested 1.3 percent more than last year.
“That is not something that certainly 90 days and 180 days ago all of us were expecting and it is because of these pulling cattle forward drought effect and so forth,” Tonsor said. “Our ability to continue to move a heavy volume of cattle and sustain, at least historically, larger cutout numbers- they are down from their peaks for sure- indirectly, is a testament to domestic and foreign beef demand strength and I hope it continues.”
Tonsor said there is a lot of macroeconomic uncertainty around the world and that tends to slow protein purchasing which is what U.S. beef is in the broader global context.
“If you pause there, I think USMEF should get a lot of credit for continuing to build and expand market access,” Tonsor said. “There is a multi-decade effort at play there, not just month to month.”
The recent success of being able to say over a billion dollars in exports per month, Tonsor said, did not happen overnight. It is a function of things that have been done a week ago, a month ago, and sometimes 20 years ago in the industry, he said, and we need to keep that in mind when we have broader industry debates that have been going on for the last couple of years.
Click the LISTEN BAR below to hear more from Dr. Tonsor and Dan Halstrom on the beef markets.
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.
Glynn Tonsor and Dan Halstrom Market Analysis of Beef Industry