Stockers Coming Off Summer Grass Could Add to Meat Supply

July 21, 2016 12:59 PM

Mid-summer shipments of cattle off grass pastures to feedlots is in full-swing.

Yearling cattle from Kansas Flint Hills pastures sent to feedyards are showing average to above-average gains this year as grazing in the region was rated good to excellent.

That may add to U.S. red meat and poultry production that is already running at record levels. For the first six months of 2016, beef production was 5.2% percent ahead of last year. Overall, total red meat and poultry production for the first half of 2016 was 2.9% above last year.

For cattlemen, the increase in meat and poultry suggests cash cattle prices will continue to find pressure from the supply side. Ranchers who have calves for sale this fall are cautioned by market analysts that we’re in the midst of a market decline that has lasted 19 months. Current calf and yearling prices are nearly 50% lower than when the market decline began, and producers should not expect a rally of major significance this fall.

That’s why market analysts are encouraging calf producers not to turn down bids for future delivery of calves if the price projects a reasonable profit on this year’s crop. They believe the price risk could increase significantly for calves held for sale into the fall months.

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