Before I get hit with the verbal lobs from the cheap seats, I’m not going to make some kind of arcane argument that we don’t want higher prices or that prices could actually be too high for some reason or another. My view is far more simplistic – the higher the better when it comes to cattle prices.
Everyone’s attitude improved with the late-spring fed rally that occurred, and the profits that were spread out through all the segments were certainly welcomed. I don’t want to be like that uncle who decides to remind you about the cost of feed, the need to clean stalls and the cost of tack on the same day you get your brand new pony, either. But there are a few points of concern when one looks at the data from a demand standpoint.
This spring, we saw exports continue to expand, we saw extremely tight numbers, and we received some help on input costs. Looking forward, supplies will remain extremely tight, and the export market, while still highly competitive and access still limited, is expected to continue to grow. Of course, no one is predicting a robust domestic economy; in fact, most are saying we won’t get much worse or should see modest improvement.
But, the downside to the rally is that given how tight numbers are, domestic beef demand continues to be pretty lackluster at the retail level. If we can get beef demand jumpstarted, $100/cwt. might look cheap.