The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
There is an interesting argument floating around that the improving US economy is paving the way for more "tolerance" for higher meat prices. It does hold some water as demand has completely outstripped expectations and to some degree is putting a real stress on not just supplies, but meat packers. They are actually having a hard time keeping up just at the processing level. Before we jump to conclusions, keep in mind that the latest demand needs were coming ahead of one of the biggest grilling holidays in the US. Demand typically starts to taper off in the last half of July. We also have to consider that for cattle, pasture conditions are improving on lessening drought conditions. That means that producers actually MIGHT be able to start increasing the cattle herd under economically viable conditions. We certainly aren’t going to see a huge jump in supplies overnight, but the idea that the supply situation will be drastically different by this time next year is going to start weighing on prices. In the short term though, the supply constraints of both cattle and hogs does dictate prices remain elevated in order to ration extremely low inventories. CLICK HERE for my daily report and check out my new "Quick Look" weekend update....
No comments have been posted to this Blog Post