- news, features, articles and disease information for the beef industry


CME: Snow Storm Disrupts Livestock, Product Movement

27 November 2018

US - Steiner Consulting Group, DLR Division, Inc. reports that a major snow storm went through key livestock production regions over the weekend, causing significant disruption to the movement of product and livestock.

It remains to be seen whether processing plants will be impacted by the snow and what effect this has on product and livestock prices. The snow and wind are negative for feedlot conditions and cattle performance.

If plants have trouble getting deliveries and shipping product to customers this will also tend to limit overall slaughter and pressure beef and pork prices higher. However, it was fortuitous that the storm happened over the weekend, thus minimizing the logistic disruptions. The overall impact is thus fairly limited.

In the short term, participants in the beef and cattle market will pay close attention to holiday demand in the domestic market and export sales trends. On those two counts, the data from last week was not particularly positive, offsetting in our mind the bullish implications of the cattle on feed and cold storage reports.

Beef ribeye prices appear to have stalled and may be close to an annual top. There is a fair amount of beef located in warehouses along the US East Coast, we think in part due to more beef cuts that have been put away ahead of the holiday.

End users will likely draw down some of those inventories and help keep middle meat prices in check. But to be sure, USDA does not tell us what kind of cuts are in cold storage so this is speculation at best.

The price of bone-in lip-on ribeyes on Friday was $7.90, down almost $8/cwt compared to two weeks ago. The price of many end cuts at this point is under year ago levels. Beef is facing more competition from cheaper pork and chicken at retail and the trend in the value of end cuts will be critical for the beef cutout in January and February.

Beef exports at this point are barely keeping pace with a year ago. In the last four weeks, exports of beef muscle cuts have averaged just 0.5 per cent above year ago and beef export sales in the last four weeks are down 4.7 per cent compared to last year.

There is a big amount of beef outstanding sales to Hong Kong, far surpassing any other market. Given the current trade environment with China, will buyers there take delivery of this product? This remains to be seen. The amount of beef sales outstanding for next year is down 15 per cent compared to the same period a year ago.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

TheCattleSite News Desk


Seasonal Picks

Animal Welfare Science, Husbandry and Ethics: The Evolving Story of Our Relationship with Farm Animals