News

Adjusted beef production forecast could be good news

A livestock market advisor says at first blush the UDSA’s Supply and Demand report didn’t have a lot of changes.

But, John Heinberg tells Brownfield the USDA adjusted the beef production forecast lower for 2019 and that could provide some support to prices. “We’re seeing those values in the markets right now,” he says.  “There are some good opportunities for producers out there to protect some of those margins.  Second half of the year is a different story.  We have a little bit of strength right now, but it’s probably going to flatten out and be pressured by the turns of the markets.”

He says the pork sector will likely continue its struggle through at least the first half of the year.  “There’s still the big underlying card – African Swine Fever,” he says.  “And what that can do to the entire global meat space.  That’s probably going to be a little bit more of a longer-term story and will continue to be something to watch as we get through this glut of hogs we have in the first quarter as the USDA is projecting.  We’ll see what happens as we move into the second half of the year.”

Following the release of the USDA report, cattle futures ended the day higher, while hog futures closed lower.