Michael UguliniCattle Call: Live Cattle
January 25th 2009 23:01
According to the United States Department of Agriculture Economic Research Service, the U.S. has the largest fed-cattle industry in the world. They are the world's largest producer of beef; however, they are a net importer of beef as well.
Most beef imported into the U.S. is lower value, grass-fed beef for processing. This is mainly as ground beef. Most of the beef produced and exported from the United States is grain-finished, high-value cuts. The United States imports cattle from Canada and Mexico.
Beef production relates to the cattle cycle. The cattle cycle refers to cyclical increases and decreases in the cattle herd size and production over time. This occurs due to biological constraints, which prevent producers from responding quickly to price. The cattle cycle normally lasts from eight to 12 years.
The determination of the cattle cycle is by the combined effects of cattle prices, the time needed to breed, birth, and raise cattle, as well as market weight, and climatic conditions.
If there is an expectation of high prices, producers slowly build up their herd size. If there is an expectation of low prices, they will draw down their herds.
Federal Government assistance to the cattle sector is in the form of emergency measures approved for a specific scope and period. This is to meet the needs of producers suffering losses due to drought, hot weather, disease, and insect infestation. These losses may also be from flood, fire, hurricane, earthquake, severe storms, or other natural disasters.
Cattle futures provide an avenue for merchandisers, producers, processors, and other parties to manage effectively the price risk they have related to the buying and selling of cattle.
These futures evaluate or reflect on the current and future supply and demand for cattle, competing meats, and feedgrains. Live cattle futures are a 40,000 pound contract (physical delivery).
These contracts trade virtually 24 hours a day on the Chicago Mercantile Exchange Group's CME Globex electronic trading platform. The contracts also trade simultaneously on the trading floor of the CME Group during regular trading hours.
Click DAILY LIVESTOCK REPORT for a summary of news, prices, fundamental indicators, and trading activity on CME's Livestock Complex...
DAILY LIVESTOCK REPORT
Most beef imported into the U.S. is lower value, grass-fed beef for processing. This is mainly as ground beef. Most of the beef produced and exported from the United States is grain-finished, high-value cuts. The United States imports cattle from Canada and Mexico.
Beef production relates to the cattle cycle. The cattle cycle refers to cyclical increases and decreases in the cattle herd size and production over time. This occurs due to biological constraints, which prevent producers from responding quickly to price. The cattle cycle normally lasts from eight to 12 years.
The determination of the cattle cycle is by the combined effects of cattle prices, the time needed to breed, birth, and raise cattle, as well as market weight, and climatic conditions.
If there is an expectation of high prices, producers slowly build up their herd size. If there is an expectation of low prices, they will draw down their herds.
Federal Government assistance to the cattle sector is in the form of emergency measures approved for a specific scope and period. This is to meet the needs of producers suffering losses due to drought, hot weather, disease, and insect infestation. These losses may also be from flood, fire, hurricane, earthquake, severe storms, or other natural disasters.
Cattle futures provide an avenue for merchandisers, producers, processors, and other parties to manage effectively the price risk they have related to the buying and selling of cattle.
These futures evaluate or reflect on the current and future supply and demand for cattle, competing meats, and feedgrains. Live cattle futures are a 40,000 pound contract (physical delivery).
These contracts trade virtually 24 hours a day on the Chicago Mercantile Exchange Group's CME Globex electronic trading platform. The contracts also trade simultaneously on the trading floor of the CME Group during regular trading hours.
Click DAILY LIVESTOCK REPORT for a summary of news, prices, fundamental indicators, and trading activity on CME's Livestock Complex...
DAILY LIVESTOCK REPORT
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