3-3 IAN Beef Predictions

Some predictions concerning what is going to happen to the beef industry. About 30-years ago - beef demand was cut in half and the cattle industry began downsizing the herd. But CattleFax CEO Randy Blach says the industry has continued to move to new and higher trading ranges. Blach expects a reduction in supply over the next several years as the cattle industry enters a rebuilding phase - but he says the industry will indeed enter a new, higher trading range. Global AgriTrends CEO Brett Stuart has compiled some key assumptions for U.S. trade this year. “One, we know we have reduced production. We have tighter supply. It is hard to export more beef when you are producing less beef. Higher prices are going to produce some pushback. We have seen that run up, we have heard about overseas importers saying we are going to wait. We will use some of our inventory right now and see where this price lands. The first quarter is going to be a little difficult. Strong Chinese demand, exchange rate, short term trend as we have seen a little bit of the dollar strengthening but I think in relative terms we are going to be relatively stable throughout 2014. Population income. We are in a situation with this tight supply where the highest bidder gets the beef. I am assuming that Russia is going to remain closed to beef.” While Stuart says imports and exports should be roughly stable in 2014 - he says the rubberband between supply and demand is stretching very tight