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Market Plus: Feb 01, 2002

posted on February 1, 2002


Market Plus: Feb 01, 2002

Pearson: And welcome to Market Plus here on Market to Market, our special Web site exclusive. This week our guest is Virgil Robinson. Virg, good to have you here.

Robinson: Thank you Mark.

Pearson: Just a few comments on the show tonight, I wanted to follow up on a couple of things. Number one, Brazilian harvest. You mentioned it's underway, a small part is underway but so far it looks average or better. That crop is going to start hitting us here pretty soon.

Robinson: Mark, I think importers are already assuming record production and awaiting the availability of that now in parts, for example, of Argentina there is a hesitancy on behalf of producers to part with that inventory simply because the uncertainty of the economy and I think they'd prefer tangible goods in contrast to currency. So, probably not a lot of pressure out of there in the immediate future.

The Brazilians, however, are fairly agressive and I think beginning to shop. Our values, loaded on a vessel, and shipped out of here in comparison to Brazilian, the equivalency in Brazil, Mark, we're still very competitive. So, they haven't, to this point, undermined us. As mentioned earlier, our pace of export just continues at a record clip.

Pearson: Will we hit the wall here?

Robinson: Well, traditionally it's like late March and April when we noticeably see export shipments in the United States begin to decline. That's likely to occur again, Mark, so the demand poll that we're currently enjoying is likely to dissapate in the very immediate future. So, we'll have to, at that point, depend solely on our domestic processor and his or her demand which is also very solid at this point in time.

Pearson: Okay, producers holding old beans better be thinking here. Virgil, I want to go over to livestock real quick. We mentioned this cattle inventory report. It's an annual report.

Robinson: Correct.

Pearson: You mentioned on the show that this is the sixth year straight for a smaller calf crop. We've had great cattle prices, low feed costs, this has got to be good news for the cow/calf guy out there.

Robinson: I think it is, Mark, however in the same context we need to remember that fewer numbers but greater productivity in our tonage situation hasn't changed significantly. We're slaughtering actually fewer fed cattle than we have in the last several years but producing more beef. I noted this week while weights didn't increase they still remain at or pretty close to record large levels, both live and dressed Mark.

So, our productivity, in terms of producing beef, producing pork, producing poultry just continues, that curve continues to slope upward. It's not likely to plateau, at least from what I understand, in the immediate future. So, I think it's good news, Mark, and as long as the economy continues to recover or the perception of the economy recovering continues, beef demand is very, very solid.

I also saw in the fourth quarter USDA estimated the average price per pound of beef sold was $3.30 up nine percent from the previous year. So, to suggest demand was poor in the fourth quarter of 2001 would not be, in my opinion, correct. It was strong.

Pearson: It may have looked that way but in fact it was, beef was moving. Virgil Robinson, as usual, great to have you with us. That's Market Plus. I'm Mark Pearson for Market to Market.


Tags: agriculture commodity prices markets news