Frankly put, hashing out the details of last week's market can be tiresome. Between the anxiousness and questioning of what the phase-one trade agreement withheld and what cash trade would amount to was enough to keep producers on their toes -- all while waiting for last week's snow storm to blow in.
By now, most know that on Jan. 15 President Trump signed the phase-one trade agreement with China, which committed China to buying $80 billion of U.S. ag purchases in the next two years. (See https://www.dtnpf.com/…) The specifics of how much product, and when the product will be purchased have to be kept confidential so that the market isn't skewed while China buys.
Regardless, there are a couple of key wins for U.S. beef producers in this agreement: 1) The bovine spongiform encephalopathy (BSE) restriction of 30 months has been lifted and now china will abide by the World Origination for Animal Health's (OIE) standard. 2) The agreement is a bilateral trade agreement between the U.S. and China which allows our President Donald Trump to advocate specifically for U.S. producers. 3) The agreement goes into effect one month from the signing date.
Cash cattle trade was mostly steady, although slightly weaker on the dressed cattle trade in Nebraska. Most of the business took place midday Thursday, starting in the South. Cattle in the Southern Plains sold fully steady at $123 to $124.25, though mostly at $124. Cattle in the North sold from $197 to $200, but mostly $199, which is $1 lower than the previous week.
Though last week's trade only amounted to steady prices, it's good to note that cash cattle prices are close in line with where prices were a year ago at this time. It was an opportunistic time for packers to buy, as the board was weaker Thursday, producer's attitudes were mixed about the trade agreement, and feeders wanted to get cattle gone before the late-week storm blew in.
As I've mentioned before, markets work best with active and informed participants. Take the time to ask questions and submerge yourself in information. Click on the link below to read the full phase-one trade agreement: https://assets.bwbx.io/…
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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