CALF_News_April_May_2021

26 CALF News • April | May 2021 • www.calfnews.net By Patti Wilson Contributing Editor I nternet technology scored high marks on Feb. 24, as CattleFax went ahead with its annual seminar during the Cattle Industry Winter Reboot. All the bells and whistles one would see at the Cattle Industry Convention were included, mainly the best charts and graphs you’ll ever study. CattleFax CEO Randy Blach started the program with an overview of the past year. He listed the 2019 Tyson fire and 2020 COVID pandemic as major influencers on agricultural markets and consumer buying habits. These “Black Swan” events backed up two million head of cattle along the supply chain, some of which are still work- ing their way through the system. Blach pointed out that we continue to make headway. Though prices soared for beef, producers in the country saw little profit. This lack of profit, along with dry weather, has led to significant herd contraction and put an end to the current cattle cycle. What’s good? Record meat U.S. meat consumption has put beef at the center of the plate with the strongest demand in 30 years. Total retail sales for beef was up 10 percent, dollar sales were up 18 percent, and beef ’s share of the increase in protein spending was 45 percent. Blach noted that government pay- ments to families due to the pandemic were helpful. Blach said the future holds significant inflation and higher interest rates. Our increase in gross domestic product (GDP) will depend on recovery from COVID, although the economic landscape for agricultural products is likely to be positive. Weather Meteorologist Art Douglas, Ph.D., never disappoints when presenting his weather outlook. He explained that our devastating cold spell in February was a result of a strong La Niña pattern in the Pacific Ocean, with a large cold area near the equator. Although it has “quieted down” and currently allows for better weather conditions, it is sure to return this summer, with unfavorable repercussions. Forecasting U.S. weather, Douglas expects California to suffer severe drought in 2021, along with much of the South- west. The northern Plains may be cooler than normal and experience dry conditions, though not as severely as California. The East Coast can expect to be extremely hot. How does Douglas formulate these forecasts? It seems like commonsense work. He explained that weather records have been kept in the U.S. since the 1800s. There were three other years, one dating back to the mid-1800s, when our country suffered the same polar vortex we endured last February. Weather patterns following these events have been predictable each time. Drought follows the next summer, along with areas of above normal temps. Explaining the “whys” of our weather, Douglas keeps close tabs on the ocean temperatures as well as sunspots, which basically control our wardrobes on earth. He said the misera- ble February weather was not an indication of “climate change.” If a polar vortex is a climate-change indicator, it means the planet has been on a crash course in 1856. That was 165 years ago, prior to the invention of the combustion engine and the industrial revolution. Corn and Soybeans Mike Murphy is CattleFax vice president of research and risk management services. He led the segment concerning grain prices, predicting corn prices to rise in 2021, partly due to the COVID crisis going away. He expects the U.S. corn crop to be somewhat smaller this year, as well. Murphy said a major factor driving corn prices lower in 2020 was a reduced use of ethanol, as many people stayed home during the pandemic. Poultry and hog numbers have also been reduced, creating less need for feedstuffs. Despite a bullish outlook in the export market, Murphy cautioned that there will be a record number of acres planted to corn and beans in the U.S. this year. The numbers seem astronomical, but Murphy’s question was, as per Douglas’s weather prediction: Are our corn and bean farmers going to drought out? Cattle Industry Winter Reboot 2021 CattleFax Outlook Seminar CattleFax CEO Randy Blach