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Market Plus: Aug 02, 2002

posted on August 2, 2002


Market Plus: Aug 02, 2002

Sprecher: Hello, This is Sid Sprecher again, with Virgil Robinson, our market analyst this week on Market To Market and this is the Market Plus edition of that. We are going to spend a bit more time on beef, Virgil and it seems that the beef industry has been weighed or pressured a great deal by other meats for the past year or so. What are the prospects for the cattle industry going into the 3rd, 4th and 1st quarter of next year?

Robinson: Sid, I think that there will be some improvement and by saying that, I am assuming now that that the economy, the U.S. economy is beginning to stabilize and ideally, will improve late here in the 2002 and into 2003. We do know that cattle placements in each of the last couple of three months, have fallen short of the previous year and that's probably been a function of poor profitability or no profitability in finishing cattle. However Sid, those placements of late, most have been relatively heavy cattle, 800 lbs. or larger, so there is still a fairly large feed slaughter schedule here to work through the summer and early fall of this year. Now, once we get past that, assuming that demand remains relatively stable or in fact improves, then the prospects for stronger prices do in fact develop, so my guess here tonight would be sometime in the 4th quarter of 2002, probably in the late October, early November period, we are going to see some upper $60 live cattle. $70 plus maybe a stretch, I am not convinced that that is in the cards until sometime perhaps in 2003. And again, as I mentioned early, much of these forecasts are predicated on the fact that we do not intensify the cow slaughter and the number of calves coming off of poor grazing and forage conditions and pouring into feed lots Sid, so that's a big assumption, because clearly the situation out West, drought wise, has not improved as we visit here this afternoon. That could affect everything for the next 6-7 months.

Sprecher: Yes, I concur or even longer.

Robinson: Right.

Sprecher: Well, thanks Virgil. That's been Market Plus.


Tags: agriculture commodity prices markets news