What is in this article?:
- Beef Cattle Short Course focuses on drought, future challenges for industry
- Be careful with futures
- Strong cattle prices forecasted.
- Tight supplies to continue.
- Drought continues to force deep herd reductions.
Be careful with futures
“If you are using futures to manage your risk, you’ve got to be careful about which way the wind is blowing in Chicago,” he said. “They can get spooked very easy. You’ve got to be careful.”
Corn is another factor affecting cattle markets. Stuart said corn supplies used to be driven by livestock markets, “but it’s now driven by ethanol production (first) and livestock second.”
Additionally, cuts of beef have had changes in pricing.
“If someone would have told me we would have record high beef prices in the middle of a recession and high unemployment rate, I would have never believed it,” he said. “The average retail price of hamburger is $3.80 a pound. Round steak is $4.50 and ribeye is $5 (a pound). It’s a very different market we are operating in right now.”
Stuart said grocery outlets have more room for profit margin with poultry and other meats as opposed to beef.
“We have huge supplies of chicken,” he said. “They keep producing, but we can’t get them to pull back the lever of production. The average retail price (of beef) is two times that of chicken."
As a result, consumers are able to purchase more chicken per pound at the grocery store than beef due to cheaper prices.
"Who gets the feature activity (in the grocery advertisements)? Is it beef, poultry, pork? Right now it’s poultry, since they can buy it cheap and raise prices.”
Restaurant activity continues to increase and Stuart said the restaurant performance index indicates half the beef goes through food service, indicating strength in beef consumption.
“In the last eight months, there’s been strong growth in restaurant index and that’s important in beef demand.”
Beef export demand continues to be steady and strengthening, further indicating a positive cattle market in the future, according to Stuart.
Meanwhile, drought was a popular topic throughout Monday’s cattleman’s college seminars, a feature of the annual short course.
“Drought is the top issue among beef cattle producers in Texas right now,” said Dr. Jason Cleere, AgriLife Extension beef cattle specialist and conference coordinator. “Many of the programs offered at this year’s beef short course focus on the historic dry conditions and how ranchers can best manage their operations and prepare for the challenges ahead.”
During Monday’s general session, Dr. Gary Smith, a former meat science professor at Texas A&M, was recognized for his work in meat research, leading meat judging teams and mentoring students throughout his career at Texas A&M.
The beef short course, held on the Texas A&M University campus at College Station, showcases the latest research and educational programs offered by AgriLife Extension, Texas AgriLife Research and the department of animal science at Texas A&M. The annual event is one of the largest beef education workshops in the country, attracting more than 1,400 cattle producers.