Farm economist forecasts rise in beef prices this year
DUBLIN, Va. — Dr. Andrew P. Griffith, an University of Tennessee Extension livestock economist, predicted Feb. 17 that beef cattle prices will probably rise in the second half of the year.
Griffith spoke to nearly 60 people during a two-part beef marketing seminar sponsored by Virginia Cooperative Extension and Farm Credit.
He said cattle prices vary in different parts of the country due to where the cattle sold are going, what they graze on and weather as well as the overall size of the national cattle herd.
Looking at exports and imports of beef on the U.S. market. He pointed out that the quality of beef produced in the United States is higher than that of the countries from which the nation imports beef. This means lower quality imported beef ends up in boxed beef and as fast-food burgers. The three top sources of imported beef here are Australia, New Zealand and Canada.
Fire, drought and flooding in Australia may play a role in beef prices here, Griffith said.
The U.S. herd is smaller too, meaning fewer calves are expected on the domestic market.
While this country imports a lot of beef, it also exports a lot, he said. This high-quality beef has a strong market, especially in South Korea and Japan. He said he does not believe the United States can count on what China is saying about its intentions to import U.S. beef.
Griffith also outlined forward contracting in cattle and how it can benefit cattlemen.
“It’s all about capturing as much value as they can,” Griffith said. “I really think people need to have a profit goal, a very specific goal to use in forward pricing decisions.”
Having the specific goal enables the producer to determine what the cattle being sold have to bring in to meet that figure, he said.
He also recommended having a budget, knowing what is invested in the cattle, the costs of production.
“I want you to know how they can help you,” he added.
Griffith told the group that the futures prices are not the same in Virginia as they are in other parts of the country due to differing circumstances.
He pointed to two possibilities for information needed to discover what is happening in cattle futures markets and ways they can help managing the risks. These are the CME Group Livestock and The Beef Market Central mobile app that provides in-depth cattle market information.
He suggested that produces of small herds of cattle might benefit from the Livestock Risk Protection Insurance.
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