Source: Oklahoma Farm Report | April 2, 2019
According to the latest reports, the U.S. beef cow herd continues to grow compared to a year ago as does the total on feed number. Don Close of Rabobank shared his thoughts with Radio Oklahoma Ag Network Farm Director Ron Hays at TSCRA’s Cattle Raisers Convention this past weekend on the current data and the story it tells us about what is going on in the beef industry right now. Close says in his professional opinion, the data suggests that the market may have already reached its seasonal peak.
“Could we see the market ease off here for a handful of weeks – come back and check these highs in April when we get to that grilling season – very likely,” he remarked. “But, to see any additional gains from here, I just think we’re there for this year.”
However, for feeder steers and calves, Close believes there is still the potential for a market rally to occur during the typical August to September summer high – although it might be a bit weaker than normal. What is important though, he says, is to understand that futures prices are $10 cwt higher than projected cash highs for the year – or as Close interprets – probably a good time to make some sales.
Currently, the herd is reportedly at approximately 32 million head, enough to satisfy demand Close says but adds that the “crippling factor” in all this will be the number of dairy cows that are liquidated during the summer months.
“The crippling factor is when milk prices get so low they elect to liquidate and they all want to come to town on the same day,” he said. “I don’t really see the motivation to liquidate beef cows – but the dairy cows will be a problem into the third quarter.”
Listen to Close offer his full analysis of the beef cattle market, on the April 2 Beef Buzz, below or CLICK HERE
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.