Livestock producers are heading into 2018 with both increasing production and demand. However, exports are critical to keep that trend moving. Mike Zuzolo of Global Commodity Analytics says for beef producers, the path of least resistance for market prices is lower.
International demand remains strong for pork, with U.S. production increasing. He says export demand and slaughter capacity will dictate market conditions for 2018.
Meanwhile, the North American Free Trade Agreement is an unknown for the market.
The Department of Agriculture for 2018 is predicting for red meat, poultry, eggs, and milk, mostly year-over-year production increases with lower prices.
Bone-chilling cold across the U.S. farm belt riled agriculture markets at midweek as concerns over crop damage and delayed export shipments sent prices of key food commodities soaring.
Exporters along the Gulf Coast, the country’s largest outlet for grains, scrambled for barge loads of corn and soybeans as two weeks of sub-freezing Midwest weather froze the Illinois River, a major grain barge shipping waterway.
In the Plains, hard red winter wheat prices hit the highest in six weeks on worries that crops sustained freeze damage, while cattle prices hit seven-week peaks on concerns over slowed beef cattle production at feedlots.
Soybean barges loaded in January and delivered to the Gulf traded as high as 50 cents over Chicago Board of Trade March futures, the highest since late September. January corn barges traded at 47 cents above CBOT March futures, a 10-month high.
Wheat Rally Continues
Benchmark HRW wheat prices on the Chicago Board of Trade on Wednesday climbed to the highest since Nov. 22 on worries over deteriorating crop conditions.
Temperatures in central and southwest Kansas, eastern Colorado and northern Oklahoma were low enough for long enough on Monday to damage or kill some dormant hard red winter (HRW) wheat, which is milled for flour to make bread and pizza crust.
How broad the damage was will not be clear until the crop breaks dormancy in late winter or spring.
Crop conditions in Kansas, the top HRW producer, are already deteriorating. The U.S. Department of Agriculture rated just 37 percent of the crop in good to excellent condition at the end of December, down from 51 percent a month earlier.
Colder air across the U.S. Plains lifted benchmark CME live cattle futures to a seven-week high late last week as beef packers rushed to secure livestock. Prices are expected to ramp higher this week as frigid weather may slow weight gains in cattle and make it difficult to sort and load livestock – which limits their availability to processors.