A USDA report coming on August 12th will give us an update on what the corn situation looks like. I have talked to several people and Kansas still has corn underwater. I have also heard reports of knee-high corn and across the road it is ankle-high. At this point, it looks like there will be a corn crop but the farmers will soon be fighting frost. this will probably lead to lower than average yields thus increasing corn prices. Again, corn prices indirectly affect cattle prices. Under most circumstances when one goes up the other goes down.
Trade: Trade is another factor that affects prices. This week a US delegation is traveling to China to work on an agricultural tariff reduction agreement. China bought 180 metric tons of beef this week but if we can get the tariff situation resolved that number should vastly increase. The US is currently waiting for Canada to ratify the USMCA, Mexico has already agreed to it. Canada will probably not ratify until the US votes on it which that may (big may) happen this fall. When Trump sends the legislation, the House will have 60 working days to vote on it and then the Senate will have 90 working days to vote on it. I don’t see any relief being added for our vegetable farmers but if USMCA does not get passed this fall it will be a huge talking point in next years presidential election and we don’t need that to happen. We have been in bilateral talks with Japan but the Japanese will not consent to fix the tariff rates until the USMCA has been signed. Currently, we have an 11% trade deficit with Japan which will keep increasing until we can both reach an agreement. We also have ongoing bilateral talks with the European Union (EU). Brexit has complicated that matter but the EU is also waiting on some chips to start falling around the globe. So in short, Japan is waiting on the US to sign USMCA, Canada is waiting on the US to sign USMCA and the EU is just waiting on someone to move. Hopefully, someone will step up and get the ball rolling. We are in excellent standing with South Korea. Their middle class is expanding and with that, they have more money to buy American beef. Our exports to South Korea have increased by 45% from last year. We need these trade deals to be resolved because that will increase demand for beef globally which in turn will affect our cattle prices.
**Update**: Trump just announced that the EU have accepted a trade deal regarding beef. The EU purchases only beef from non hormone treated cattle. This deal will increase EU’s duty free beef import amount from 18,500 metric tons to 35,000 metric tons. This is equivalent to about 400 million dollars.
Electronic ID Tags: I will have more information on this as it comes in but by 2023 electronic identification ear tags (EID) will be required for cattle. The only exemptions will be feeder calves that travel out of state and cull cows and bulls going to slaughter. If you bring a cow to a sale barn you have to sign a letter saying that she can only be sold as a slaughter cow. If not then you will be required to have an EID for that animal. This movement towards mandatory EID means that you will have to register your farm and receive a premise ID number from the Georgia Department of Agriculture. It is a very easy process; I have the paper here at the office that you need to fill out.
Prices: Across the state cattle were overall higher. Slaughter cows and bulls were $2-$3 higher while feeder steers were a steady $4 higher and feeder heifers were $3 higher. Replacements were about the same with little to no movement in price. August 12th looms and when the report is published we will have a better outlook into what may happen when the fall runs start.