7-29 IAT Beef Snapshot

 Rain – Too Much of a Good Thing?

Michael Stolp who is a genius at market analysis in the ag sector for Northwest Farm Credit Services was kind enough to provide us with his 2nd quarter Market Snapshots. Today he talks rain and beef. “Rains in May and June helped some Northwest agricultural producers and hurt others. Rains provided dryland wheat growers in Montana, Washington and Northern Idaho a strong boost in yield potential. Montana cattle producers also saw significant improvement in pasture conditions and better prospects for dryland hay yields. Meanwhile, untimely rains caused widespread damage to first-cutting hay in areas of Washington, Oregon, and Idaho. The Northwest cherry crop also saw widespread harvest disruptions and substantial crop damage that will impact growers’ financial returns. Excessive rain has also challenged crop management for wine grape growers.

The following highlights depict the general health of select industries included in Northwest Farm Credit Services’ Knowledge Center Market Snapshots, which are available at northwestfcs.com/resources.

Beef -- Cattle markets face mixed signals. Although record-low cattle inventories position the industry for strong cattle and beef prices, falling prices for competing proteins, lackluster demand for beef, and a largely unprofitable feedlot sector are pressuring cattle prices lower. Unlike prior years, feeder cattle prices didn’t rally between January and April. Cash prices fell an average of eight percent between January and May as feedlots continued to struggle with high priced corn. The large corn crop expected for 2013 should reduce feed costs and support rising feeder cattle prices.  Most cow/calf and stocker operations remain profitable. Montana pasture conditions significantly improved due to much needed rains. Areas of Idaho and Oregon continue to struggle with dry conditions that will limit herd expansion and impact profits.”