CALF_News_April_May_2019

16 CALF News • April | May 2019 • www.calfnews.net C attleFax presented its Annual Outlook Seminar at the 2019 Cattle Industry Convention to an inter- ested and engaged audience. Altogether, their information provided a solid basis for predicting another year of moderate profitability for U.S. cattle producers. the Corn Belt with few planting delays as El Niño begins to slowly fade. Rains are expected to be abundant in the southwest United States, including New Mexico, Arizona, California, Nevada and Colo- rado. Texas may see moderate drought this year, and the Midwest can expect above-normal temperatures this summer. The most interesting feature of Doug- las’ presentation was his prediction of major drought in Australia, or rather the continuation of an existing problem that is moving into the major grazing areas of the western part of the continent. He described Australia’s condition as severe, and will continue to be. South America is in a similar situation. The question remains, how will that affect cattle num- bers in these regions? As food for thought, Douglas explained that the earth’s North Magnetic Pole is racing away from Canada toward Siberia. What does this acceleration mean? It affects sun spots, which in turn greatly affect our weather systems. The phenomenon is being closely watched by weather scientists and those folks who live by their compasses, such as merchant marines. It may continue to wreak havoc on our weather systems. The economy CattleFax Analyst Mike Murphy gave the Economy, Energy and Grain Outlook. Most important on the agricul- tural economy agenda is ratification of the USMCA, the new trade agreement between the United States, Mexico and Canada. It is likely to be completed soon. China presents a more complicated problem, dealing with matters of their theft of U.S. intellectual property (IP) as well as a more severe trade imbalance and their burgeoning population. Their purchasing index is down, also a bad sign for their trading partners. China’s current African swine fever outbreak is severe, considering they feed the world’s largest population and contain the earth’s largest swine population, as well. Murphy expressed further concern that Brexit – the United Kingdom’s withdrawal from the European Union – needs to happen smoothly, as world trading partners shift positions in the coming year. A most optimistic picture is painted with the U.S. Median Household Income, which has risen each of the past five years. It is up a whopping 15 percent since 2014. This points to greater demand for all proteins. Beef, being a premium prod- uct, is in a strong position to benefit. The U.S. is now energy independent, due to a 70 percent growth in oil produc- tion in recent years. In addition, we are enjoying an over 400 percent increase in U.S. oil exports, and are the No. 1 energy producer in the world. Grains and hay The U.S. is headed for record corn production in 2019 and 2020. This coincides with record cattle on feed, as well as record poultry production. Corn is expected to yield an average of 176.1 bu./acre, with prices predicted at $3.60-$4.00/bu. Tightening stock and the smallest carryover since 2015 will T H E C A T T L E C O M M U N I T Y G A T H E R S I N N E W O R L E A N S CattleFax Outlook Seminar By Patti Wilson Contributing Editor CattleFax President Dale Smith, Amarillo, Texas, directs the CattleFax business meeting during the Cattle Industry Convention in New Orleans. CattleFax President Dale Smith antici- pates record protein production in 2019, with beef, pork and poultry numbers up an astonishing 11 billion pounds in the past four years. Key to our financial survival is the strong demand for protein, both here and abroad. Our booming U.S. economic growth and export markets were up by double digits for the third straight year. On the bad side, slaughter capacity in the U.S. continues to be lim- ited, causing leverage loss to cattle feeders. Nonetheless, feeder cattle and calf prices were supported by moderate profits at the feedlot from 2017 to mid-2018. What about the additional tonnage of meat coming down the pipeline in 2019? Our profitability outlook is solid in the coming year because demand for our product continues to grow. Weather Meteorologist Art Douglas, Ph.D., in his annual Extended RangeWeather Out- look, predicted a relatively mild spring in Meteorologist Art Douglas, Ph.D., says El Niño is hanging on and will likely produce above- average precipitation through May for the Southwest, High Plains and Northwest, and drier conditions for the Corn Belt, Northeast and much of the South. Photos by Larry Stalcup