It has been a while since I gave a cattle update. The markets shut down over Christmas and New Years so I was giving it a few weeks to get back up and running normally.
Market: Cash trade has dropped off since the beginning of the year but cattle prices are expected to show a little improvement over 2019 prices. The cattle cycle works off of a cyclical expansion curve and we are currently coming to an end of an expansion. This is based on compiling numbers from the US total. Georgia is still in an expansion as we have increased the Georgia herd by about 20,000 last year. The US reduction in the number of cattle means that beef production is slowing down. Simply put, the law of supply and demand tells us that as supply decreases then demand increases. When supply decreases, price and demand increase until supply catches up. There are several other factors that affect the supply and demand curve’s movement such as income, taste, and future expectations but the main thing to take away is that with total US cattle numbers declining, prices have the potential to get bumped this year. Now it has been forecasted that feed ingredients will be higher this year so I wouldn’t look at the potential cattle price increases as a victory because if the forecast is correct on the higher feed ingredient prices then it could wash. This past week slaughter cows and bulls were $2-5 higher, small calves were steady and bigger calves (600+) were $2-3 lower.
Trade: Phase one of the US-China Trade Deal has been signed but we don’t know how much of the 47% beef tariff will be reduced. Chinese markets are currently closed due to coronavirus. CNN has reported that a doctor has recently successfully treated a patient with the coronavirus. According to Kirk Donsbach of Daniels Trading, markets are currently in a sell first, ask questions later mode. Hopefully, this coronavirus scare will pass soon. I read where there has also been a successful treatment of African Swine Fever (ASF). I hope this is true because ASF has wiped out millions of hogs in Asia and disrupted global meat trade. It has helped the US pork market but I can’t stand the mass killings of animals from disease.
Tips:
- Whole cottonseed is still a great feed (and cheap option) to supplement your herds. Don’t feed over about 5-6 lbs per head per day. It needs to be kept at this rate because of the heavy fat content. The higher fat content can disrupt the rumen and lead to acidosis. It will not make your bulls sterile at this rate.
- If you are grazing cattle make sure you have a hi-mag mineral available. This is common knowledge but I had a cow get the staggers a few weeks ago with plenty of minerals put out. Apparently she was the only cow not stopping by the mineral box and it didn’t take long to affect her.