High volumes of cattle shipped to Mexico are impacting fed cattle markets, University of Tennessee ag economist Andrew Griffith says.
“The finished cattle market is influenced by many factors, but one factor that needs to be noted is the number of cattle being shipped to Mexico,” he says in his weekly market outlook. “Since the first week of July, over 10,000 head of beef cattle for slaughter have been exported to Mexico compared to 134 head for the first 10 months of 2019. These are some of the highest volumes of cattle being shipped to Mexico for slaughter since the early 2000s.”
Griffith says these exports have the greatest influence for cattle feeders in the southern U.S.
As for beef cutout values, it has been somewhat difficult to find a set direction for the market.
“Though the Choice cutout price only declined modestly compared to a week ago, and the Select cutout price shows a gain relative to last Friday, it is difficult to say there is any kind of stability in the market,” Griffith says. “It is also difficult to say boxed beef prices are turning the corner and going to show consistent week-over-week gains.”
A lot of the focus now is on what upcoming holiday beef demand will look like.
“Seasonally speaking, it is good to be exiting October and moving into the end of the year holiday months,” Griffith says. “This generally marks the time when retailers begin making orders for end of the year holiday events. The issue is that these purchases may be muted relative to previous years since the restaurant and food service industry is practically a no-go-zone for many consumers.”
He says many business holiday parties could be cut back or canceled, and big family gatherings could be impacted as well. However, Griffith still expects many consumers to want beef for holiday meals.
“Many businesses have already canceled social celebrations and there is considerable encouragement by health officials to minimize holiday gatherings for families,” he says. “This will definitely keep beef from moving at the same pace it traditionally does. However, I am sure there will still be consumers who choose to make prime rib the centerpiece of their Christmas meal.”
Griffith says many producers are frustrated with prices for calves, but he expects strong cattle marketings in early November as the spring calf crop is weaned and hauled to sale barns.