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Message
re: Meat prices spiking. Here is supposedly why.
Posted on 5/27/20 at 11:23 am to AgGator
Posted on 5/27/20 at 11:23 am to AgGator
Really interested in what you think about this Trump talking about stopping imports
I personally think that needs to be done except for Canada and Mexico. Halt New Zealand, South America, and Australia imports. I believe as a producer we are fixing to get into unsupportable calf prices due to rise in all of our input costs. Processors will be watching box prices fall as slaughter volumes increase and will stop supporting the fed market. Feedlots will adjust prices to stocker and feeder cattle which will fall to the producer.
I personally think that needs to be done except for Canada and Mexico. Halt New Zealand, South America, and Australia imports. I believe as a producer we are fixing to get into unsupportable calf prices due to rise in all of our input costs. Processors will be watching box prices fall as slaughter volumes increase and will stop supporting the fed market. Feedlots will adjust prices to stocker and feeder cattle which will fall to the producer.
Posted on 5/27/20 at 11:52 am to angus1838
In general I'm not a fan of that. Almost all of the beef we import is lean grinding beef of which we don'y make enough of. The American appetite for beef is in the form of steaks and ground beef. We produce plenty of the high value cuts but not enough of lean meat. We could grind up more chucks and rump but those cuts (largely as roasts) have a demand in other countries where it makes more sense to export them rather than grind them for domestic sale as ground product. That's where countries like Australia and New Zealand come in (along with Mexico and Canada). They mostly produce lower quality, leaner animals that we use to make ground beef with. We also import live animals from Mexico and Canada that are then finished and killed here. You might argue that those live animals hurt the demand for our own domestic animals but imports and exports with those two countries are very important for our own industry where the impact offsets the gain.
I think we are going to be in for a pickle until we get more current on fat cattle. Right now we are horribly uncurrent and therefore placements into feedyards are down which then feeds back into the feeder and calf markets. I don't know that our current import and export structure has that big of an impact on that in the overall scheme of things.
What we need in our industry is better price discovery and competition in fat cattle. What people disagree on is how to get there. More packers would be great but it isn't as simple as some might make it out to be.
I think we are going to be in for a pickle until we get more current on fat cattle. Right now we are horribly uncurrent and therefore placements into feedyards are down which then feeds back into the feeder and calf markets. I don't know that our current import and export structure has that big of an impact on that in the overall scheme of things.
What we need in our industry is better price discovery and competition in fat cattle. What people disagree on is how to get there. More packers would be great but it isn't as simple as some might make it out to be.
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