It’s been hot and dry but we finally got some rain last night, Thank God! Now its time to get my ground ready for winter grazing but I got to hurry. Here are some updates on cattle. I’ve been meaning to get this out but I’ve been tied up the last two weeks at the fair.
Trade: We have a trade deal with China. No one knows what it entails yet but it is sounding like the “deal isn’t quite done”. We have all heard that before, I’ll believe it when I see it. In regards to cattle, China is more of an opportunity cost. We just recently entered the Chinese market directly. China has been circumventing us through Hong Kong and Korea routes for years. Trading beef directly with China is a big plus for our product because we have the best-tasting beef in the world. I have traveled to Japan and Asians love American beef. Also, it allows China to buy more of our product at a time which increases demand and usually results in price increases. Hong Kong reduced their imports this past week by 36,000 metric tons, probably due to the proposed US/China “agreement”. The Japan agreement to lower tariff cost to the levels of the Trans-Pacific Partnership (TPP) has really helped us out on the global front. Japan and Korea are still our leading exporters accounting for about 50% of our exports. Overall tonnage is estimated to be down about 1% or 3.12 billion pounds for the year. Our imports have been a tick lower for the year but that’s a result of us having more of our beef on hand. Canada (9%), Australia (7%), Mexico (13%), and New Zealand (28%) account for a majority of our imports.
Markets: Prices have moved up a little bit. Up, down, up has been the trend over the past few weeks. The main thing here is that the market is slowing climbing. We had an initial rally, then decline, a secondary rally, then secondary decline. However, the declines were short and did not totally erase the rallies which are why Feeders have risen about $5 in the past month, according to CME. Light calves (200-500lbs) in Georgia last week averaged $2-$5 higher while feeders (500-750lbs) were steady $3 higher. Slaughter cows and bulls were $2 higher.
Tip: If I had access to cheap feed and had some land, I would be buying some wet bag cows (had at least 1 calf) and turning them out. They have by far been the best deal around for the past several weeks. They are thin, usually open or short bred but you can put a nice little herd together for a very reasonable figure.