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PG. 26 THE RURAL VOICE, MAY 1983
FARM MARKET PERSPECTIVE
PREPARED APRIL 13/83
by John DePutter
THE NORTH AMERICAN BEEF MARKET
IS REALLY COOKING. Live cattle in
Omaha at time of writing are over $70
U.S. for best choice steers. In Toronto,
choice steers are $82 to $86, with some
sales over that. Dressed steer beef in the
U.S. is around $1.10 and wholesale beef
In Toronto (packer to retailer) is $1.50.
U.S. markets were boosted partly by poor
finishing conditions and losses in south-
ern feedlots during snowy and rainy
weather. Western cattle have been flow-
ing across the border into the U.S.,
forcing Montreal buyers to bid higher.
Farmers who bought feeder cattle last
fall, are earning good profits.
THE BEEF MARKET MAY BE RIPE FOR
A CORRECTION, BUT SOME ANALYSTS
EXPECT STRENGTH INTO JUNE. Look-
ing at weekly futures charts, it can be
noted that since the fall of 1979, nearby
cattle futures have tried to pierce above
the $72 to $75 area, but have been turned
back at every attempt. The nearby April
futures presently are at about $73, having
failed so far to break above that overhead
resistance once again.
MIDDLEMEN TOOK A BIGGER CUT IN
THE BEEF DOLLAR IN MARCH. Retail
beef price rose eight cents to $2.85 per
pound on average, according to the
Ontario Federation of Agriculture's food
basket report, while the farm -gate equiv-
alent was down one cent from February.
Therefore, the farm to retail spread
increased from 97 cents to $1.06. Pork
prices were down two cents as retail to
$2.36 a pound, while the farmgate
equivalent was down five cents to $1.23.
Therefore, the spread increased by three
cents to $1.13 a pound. However, for
chicken the retail price went down two
cents while farmgate prices rose a penny
in Ontario.
HOG MEN WERE EXPANDING WITH
GUSTO. When the U.S. government hogs
and pigs report was released on March
22nd, it showed a six per cent increase
over last year in the breeding herd.
Market hog numbers were up two per
cent compared to the previous March 1
count. U.S. farmers said they farrowed
five per cent more sows during the recent
Dec. to Feb. period. And weather was so
good that those sows brought record
sized litters into the world resulting in
The world is getting smaller every day
and international events can influence
decisions you make about your farm
business. In this monthly column John
DePutter will be alerting Rural Voice
readers to trends which could affect the
farming community.
a 10 per cent increase in the pig crop.
Most U.S. sources we contacted before
the report did not expect this kind of
huge expansion. Hog futures fell limit
after the news. By now. most analysts
feel the bearish news is largely digested
into the market, and the usual summer
uptrend may begin soon. Long term
hopes however have been scaled down.
After a summer upswing, some fore-
casters look for further slippage.
WE MENTIONED LAST MONTH THAT
AMERICANS ARE AIMING PORK EX-
PORTS AT JAPAN. Since then, a report
from the U.S. Meat Export Federation
said the U.S. should increase its share of
Japan's imported pork market from 24 per
cent in 1982 to 29 per cent in 1983. The
federation's marketing survey team was
apparently told by the Japanese that with
prices being even, they would select U.S.
pork over Canada's because of quality!
But the Japanese reportedly added that
with high U.S. hog prices, a strong U.S.
dollar, and lack of locked -in long-term
prices, greater U.S. imports are prohi-
bited at the moment. The U.S. study
team was also told that Japan aims to be
90 to 95 per cent self-sufficient by 1990.
THE U.S. AGRICULTURE DEPARTMENT
HAS RAISED ITS ESTIMATE OF THE
1982-83 WORLD GRAIN CROP. It's a
record 1.666 billion metric tons, up two
per cent from last year's harvest, and
slightly higher than the previous month's
forecast. USDA said in releasing the
report (on April 11) that the new estimate
reflects bigger harvests in Europe and
Pakistan. USDA pegged Brazil's soya
crop at a huge 14.9 million metric tons,
Grain and oilseed markets in Chicago
suffered bearish key reversals on charts
just before the above news came out.
And following the news, prices slipped
further. This action followed strong
advances during most of March and
April.
THE LONG TERM TREND ON CROPS
SWITCHED TO "UP" LAST OCTOBER,
said Jake Bernstein, a well known U.S.
cycles analyst, who was interviewed
recently. Bernstein said that the under-
lying trend in corn, soybeans, wheat and
oats should carry prices generally and
irregularly higher into 1984. He cautioned
however that there will be ups and
downs, so grain marketers will have to be
sharp to watch summer weather rallies
for pricing opportunities.
MASSIVE SIGN-UP IN U.S. PIK PRO-
GRAM DRAMATICALLY CHANGES
LONG TERM SUPPLY -DEMAND PIC-
TURE. The U.S. government reported in
late March that so many farmers em-
braced the various acreage reduction
schemes, that the corn crop may only be
5.6 billion bushels. And to get to the 5.6