Springtime, Cattle Markets and Government Lobbyists

Spring arrived this weekend in a big way. Yesterday was 70 degrees, preceded by several nice warm days and the 12" of ice on the reservoir has vanished. The geese came back and this morning 23 Tundra Swans visited. We are always glad to see winter over, and now look forward to the return of all the wildlife that flies away during the cold months.

So what's going on with the beef industry? Well, there has been some good stuff happening so I'll start there.

Last year's record high prices have sparked a lot of interest in herd growth. Retention of female cattle is way up, and the national herd numbers have gone up more than 1 percent, .5 percent greater than expected. This will encourage a lot of younger ranch folks to stay in the game.

Cash cattle prices are still high, but have levelled out, and in some markets have declined slightly. Cattle futures prices have dropped considerably. Some of the areas hit hard by dry weather have gotten better, although there are still pockets of drought in some states. Fuel costs have dropped a bunch. The US of A is now a major player in the global energy game and that has led to 25% increase in the value of the Dollar against other world currencies.

So, lots of good stuff happening.

Of course there is often a fly in the proverbial ointment, and in this case the fly is none other than the US Government in the form of the Dept. of Agriculture. The USDA has, in its infinite wisdom, decided to remove lean beef from the list of things you should eat! This, in spite of the fact that the National Heart Association has added lean beef to the list of things that are good for you. Go figure.

There is actually a reason for the actions of the USDA in this case. There is a huge surplus of grain in the US and the price of grain has plummeted, while the opposite has happened with the cattle market. Additionally, a lot of folks that care about proper nutrition are cutting back on carbohydrate rich food in favour of high protein diets.

I guess the folks who grow grain just have the best lobbyists.

- George