July 2, 2018
Cattle and beef markets are not independent from global markets
by Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
For the cattle industry, July 4 not only is a celebration of our nation’s independence but also represents summer beef demand for grilled steaks and burgers. The holiday falls on Wednesday this year and doesn’t stretch into a long weekend thereby limiting activities and most likely beef demand somewhat as well. It also marks the mid-point of 2018 and an opportunity to consider the second half of the year compared to the first six months of 2018.
Despite increased beef production in 2018, up nearly four percent so far this year, beef demand has been quite strong and has limited beef and cattle price pressure in the first half of the year. Domestic beef demand has been buoyed by strong a macroeconomic performance including a declining unemployment rate. Foreign demand for U.S. beef has boosted total beef demand with a 13 percent year to date increase in beef exports through April. Strong year to date beef export increases have been led by South Korea, Mexico, Hong Kong, and Taiwan with number one Japan up slightly this year.
The second half of the year could bring more demand challenges. Numerous countries have implemented retaliatory tariffs in response to U.S. tariffs on steel and aluminum. In some cases tariffs include beef and will have a direct impact on beef markets. The bigger impacts are likely to be indirect in a range of impacts on other markets. Other meats, especially pork, are more directly impacted among the wide range of U.S. products subject to tariffs. Negative impacts on exports of other meats means that more total meat must be absorbed in the domestic market. Total U.S. red meat and poultry production is expected to increase nearly three percent year over year to a record level over 102 billion pounds. Any slowdown in meat exports will undoubtedly add pressure to domestic meat prices.
Tariffs on U.S. products will impact domestic GDP, slowing macroeconomic growth and reducing domestic spending. At the same time, U.S. tariffs on steel and aluminum from numerous countries have been broadened, in the case of China, to include a host of other imports. This will impact domestic prices for products manufactured with imported inputs as well as directly increasing prices on imported consumer products. Tariffs on U.S. imports are largely paid by consumers as higher retail prices in the U.S. All of this will negatively impact domestic spending and employment with likely negative consequences on domestic beef demand.
Beef production is projected to grow over four percent in the second half of the year, contributing to a three percent increase in total meat production. Negative impacts on beef and other meat demand may have bigger price implications in the coming months as markets struggle to absorb large meat supplies in the U.S.
Follow BQA guidelines when treating and selling cows
by Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Summer time often brings a few infectious ailments to beef cows. Common problems include eye infections and foot rot. Treatment of affected cows will often involve the use of antibiotics.
In the past, and on very rare occasions, violative residues of pharmaceutical products have been found in carcass tissues of cull beef cows. Violations of drug residue regulations can result in expensive fines (or even worse, jail time) for the rancher and a “black-eye” for the entire beef industry. It is vital that cow calf producers have a close working relationship with a large animal veterinarian in their area. If a cow has an infection or disease that must be treated, her owner should closely follow the veterinarian’s directions, and also read the label of the product used. Most of these medications will require that the producer keep the treated animal for the label-directed withdrawal time. The Oklahoma Beef Quality Assurance Manual contains the following discussion of medication withdrawal times:
“A withdrawal time may be indicated on the label of certain medications. This is the period of time that must pass between the last treatment and the time the animal will be slaughtered or milk used for human consumption. For example, if a medication with a 14-day withdrawal period was last given on Aug. 1, the withdrawal would be completed on Aug. 15 and that would be the earliest the animal could be harvested for human consumption. All federally approved drugs will include the required withdrawal time for that drug on the product label or package insert. These withdrawal times can range from zero to as many as 60 days or more. It is the producer’s responsibility to be aware of withdrawal times of any drugs used in their operation. Unacceptable levels of drug residues detected in edible tissues collected at harvest may result in traceback, quarantine, and potential fines or jail time. Substantial economic losses may result for the individual producer as well as negative publicity for the entire beef industry…”
Producers are responsible for residue problems and should follow these four rules:
- If ever in doubt, rely on the veterinarian-client-patient relationship you have established with your veterinarian.
- Use only medications approved for cattle and exactly as the label directs or as prescribed by your veterinarian.
- Do not market animals for food until the withdrawal time listed on the label or as prescribed by the veterinarian has elapsed.
- Keep well organized, detailed records of pharmaceutical products given to individually identified animals. Include in the record, the date of administration, route of administration, dosage given, lot or serial number of product given, person delivering the product, and label or prescription listing of withdrawal dates. Examples of Beef Quality Assurance records can be found in the Oklahoma Beef Quality Assurance Manual website at the menu item “Record Keeping Forms”. Records should be kept for 3 years after sale of the animal.
Editor’s Note: Resources and information on the Texas Beef Quality Producer Program is available at texasbeefquality.com.