It sure looks like its going to be a Happy New Year! Record cattle prices, balmy weather, and better than expected wheat pasture sure make for a good start! Hopefully, everything will at least stay this way!
One nice thing about the cattle market making a big jump after the first of the year is that it is more historically normal and would make a person think that things may not be quite as chaotic. Of course, the numbers of cattle in the United States will certainly play a major role in what “normal” might be over the next few years.
Timely rains at the end of last year made wheat pasture have a completely different look than it did in November. Cattle continue to get turned out as the warm weather and moisture is letting the wheat grow. Pasture is sure more expensive than the years before, but still cheaper than locking them up. It will be interesting to see how the cattle do without the extra roughage that normally goes along with the wheat but was burned up with drought last year.
It may be nice to enjoy sunny warm days in January, but we sure need that snow to put moisture and nitrogen in the ground, not to mention the run off for next springs creeks and rivers! The recent rains have been nice, but not near enough to alleviate the drought situations, or help the future. Of course, if all the cities and resorts would do with less landscaping and fountains, there might be more water available for drinking and living.
2012 looks like it’s going to be a great year of opportunities! An election always adds something to the market, new players in the packing game will also lend some type of twist, and our exports and demand still look great. Per capita consumption has come down over the years, but the population has almost tripled. Each person may not be eating as much beef, but 6 billion people is a big number of people to feed!
The nation’s cow herd has a long way to go to get the numbers back up and it certainly doesn’t happen over night. The folks in Chicago seem to have forgotten about delivering the products that are sold on the futures board, which basically makes the CME a speculative adventure, not what is was originally intended for. It would be better if all those hedge funds that move the market actually had to take delivery or have an investment in the actual commodities they are betting on.
It is a great market with lots of opportunities! Take advantage of it! A person probably ought to think pretty hard about how cheap heifers are in relation to steers and educate those city folks about the likelihood of breeding a steer!
Get in the action! Go to the auction! Raise some beef!