Latest US Reports Bullish for Cattle Markets

The US Department of Agriculture recently released four reports with bullish news for the cattle and beef industry, Sarah Mikesell reported this week for TheCattleSite.

“There was nothing but good news for beef in the back pages of the January supply and demand report,” said Allendale Inc.’s chief strategist, Rich Nelson, commenting on the reports.

“2016 production was cut by 75 million pounds as USDA noted that placements have been hit hard in recent months. They now see beef production this year at 3.8 per cent higher than 2015.

“USDA has fixed their excessively high estimates of beef production in Q1 and Q2, now +0.7 per cent and +1.7 per cent vs. 2015. It could be argued that there might still be a more to take off that Q2. Also supportive, they took off 100 million pounds from their previous import number and added 50 million pounds to exports.

“They now see the amount of beef left for the US consumer, which is the determinant of price, at 0.7 per cent higher than last year. That increase is down from recent months.

“On the bearish side, we still have not fixed our meat supply problem. Gains in USDA's estimates of chicken, pork, and turkey production offset today's beef decline. The consumer was faced with 4.4 per cent more meat in 2015 than 2014. We will add 1.3 per cent to that tonnage in 2016.” – Click here to read more.

In environmental news, reduced meat consumption might not lower greenhouse gas emissions from one of the world’s biggest beef producing regions, Brazil, new research has found.

The study's conclusions depend on how farmers change land use in response to meat demand.

Lead author Rafael Silva, of the University of Edinburgh’s School of Mathematics, explained: “Much of Brazil’s grassland is in poor condition, leading to low beef productivity and high greenhouse gas emissions from cattle.

"However, increasing demand for meat provides an incentive for farmers to recover degraded pastures. This would boost the amount of carbon stored in the soil and increase cattle productivity. It would require less land for grazing and reduce deforestation, potentially lowering emissions.” – Read more.