Cattlefax Says Expansion Phase Is Approaching

US – Cattle markets look ‘rosy’ and are transitioning from liquidation to expansion, according to a Cattlefax analyst.
calendar icon 4 August 2014
clock icon 1 minute read

Robust domestic and global beef demand are reasons to be cheerful, senior analyst Kevin Good told the Cattle Industry Summer Conference in Denver last week.

“It’s one for the ages,” Good said, referring to the cattle market. “It’s been a tremendous change from a year ago.”

He urged producers to take advantage of ‘friendly’ fundamentals but added that a market correction could be soon.

“Something needs to give,” he said. “You have to be prepared for that ceiling,”

Describing the tight beef supplies and challenges to rival proteins as a ‘perfect storm’, Mr Good underlined the Porcine Epidemic Diarrhoea virus and hatchability and genetics issues in poultry for limiting pork and chicken supplies, meaning beef values are not far out of line.

Corn prices are also helping, he added. At their lowest since 2010, analysts expect $4 per bushel corn and possible as low as upper $3.

He added that range conditions are at their third best for 20 years and exports are increasing.

But he cautioned that the next three years were open to drought conditions, with much of the industry in a 20 year drought.

“We are living in extraordinary times and prices are going to be continually strong over the next couple of years.”

However, he added: “It’s easy to be optimistic today, but markets don’t go up forever.”

TheCattleSite News Desk

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