Exports of U.S. beef moved 3 percent higher in volume in May, and a healthy 9 percent in value, while pork exports dipped 3 percent in volume and 3.6 percent in value, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
Last week’s short trade week saw surprisingly sluggish buying behavior from packers. Because of the July 4 holiday, markets—cash and futures alike—closed early on Wednesday and were closed Thursday, leaving only Monday through Wednesday and some of Friday for trading cattle.
With the first half of the year behind us, it is useful to take a look at what has happened and the prospects for the second half of 2013. Beef demand has been and remains a crucial question, perhaps even more so in the second half of the year. Currently, Choice boxed beef prices are roughly $127/cwt.
“It is a rare occurrence that all sectors within the cattle industry are profitable at the same,” says report author and Rabobank FAR group analyst Don Close. “However, before the U.S. cattle industry can begin to fully rebuild after several years of contraction, it is necessary for equity recovery to take place in the cattle feeding sector.
Light cash trade developed sporadically throughout last week with Iowa and Nebraska selling several hundred head on Tuesday and Wednesday at $120-122 live and $190-192 dressed with a few at $194 dressed going to a regional packer in Nebraska.
Mexico has long been a major beef industry trading partner with the U.S. in roles that have continually evolved into deeper and more integrated relationships. For many years, Mexico has been the major source of imported feeder cattle. U.S.
Last week saw donut-like activity in the cash fed market. Light trade occurred on Monday and Tuesday in Iowa at $193.50-195 dressed and $122-124 live. This was called clean-up trade from the previous week by Troy Vetterkind of Vetterkind Cattle Brokerage.
Beef production estimates were increased by 330 million pounds (mp) to 25.52 billion pounds (bp) for 2013. Continued poor range conditions in key cattle states pushing relatively large placements of cattle into feedlots and continued high cow slaughter were credited by USDA as the motivation behind the estimate increase.
The cash trade was put off until later last week as packers again tried to hold onto their positive margins in the face of steadily declining product values. Bids only surfaced on Wednesday at $121 live in the South Plains, which would be $3-4 lower than the cash prices of the prior week.
The cash markets were sluggish as packers are trying to hold onto their positive profit margins as cutout values have begun to move lower. By midweek, the asking prices were $126-128 live and $202-204 dressed, but packers were only bidding $122 live in the South Plains and $197 in Nebraska by Thursday morning.