Futures markets have been pretty rough lately, the most volatile I’ve ever seen. It’s amazing there were no buyers for feeder cattle options, there were plenty of sellers with the Livestock Risk Protection program in play. The crash of feeder cattle futures did bring the market down, but after watching several feeder calf sales in early December, most of the long-weaned steers were still bringing $1,400-1,500 per head. I have the feeling we are either at the bottom or near the bottom for calf prices.
We as an industry have processed 1.5 million fewer fed cattle than last year. We just let marketings get away from us; we didn’t move as many fed cattle through the fall as we needed to, now we are looking at $170 fed cattle prices and carcass weights on both steers and heifers are at a record high.
The beef cutout has slipped down to $290, and packers are processing more cattle for the holiday rib market. Packers processed 635,000 head for the second week of December and were expected to process 645,000 last week. And it looks like the packers are back in the black. Looks like consumers are getting a Christmas break on beef.
The folks at the Cattle Report said, “The current situation in the replacement markets is indicative of where we are in the cattle cycle—stalled out. The price signals given during the past year designed to encourage rebuilding have been put on hold due to the sharp decline of replacement prices the past few weeks of the year. Input cost for breeders has continued to rise and the high prices needed for calves has now faltered giving a mixed signal to the breeders. The recent setback in prices will slow rebuilding stretching it out for a longer duration.
“Much of the South that had suffered drought is now receiving needed rainfall and some unneeded tornadoes in Tennessee. The Texas and Oklahoma panhandles that were unable to deliver grazable wheat fields are in line to receive rains this week bringing help to dry conditions. Nationally the drought map will be changing and those conditions will be favorable to expanding the breeding herd.”
Back to this COP28 episode, this is the UN’s annual climate fest. Environmental actors from around the world, 200 countries, gathered for this climate love fest.
This group is urging wealthy countries to give up on meat and move to other plant-based proteins. I think we have already been through this episode with Beyond Beef and other cohorts, including Tyson and JBS, moving into the plant-based protein space.
It doesn’t appear that North Americans are too interested in those fake meat products. They had a good start but now they have lost sales and value in their companies; folks are not excited about their products. Now they are working to have their products written into policy to ensure their survival.
If these organizations attempt to shove this policy down people’s throats they will find serious resistance. Americans already eat 260 pounds of meat per year, far more than most of the world.
Their anti-fossil fuels agenda has already failed, and the advent of electric vehicles (EV) is becoming a failure. The EV autos are not selling—Tesla is the only successful EV company and those cars are more of a status symbol. None of the EVs have a respectable driving range. Go 300 miles and plug it in if you can find a working charger. We need to watch out for policies that offer no real benefit to society. We all know that agriculture’s greatest carbon footprint is transportation. — PETE CROW
