Shootin' the Bull about more imported and domestic beef supplies

“Shootin’ The Bull”TM

by Christopher B Swift

7/17/2026

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Live Cattle:​

In my opinion, increasing imported beef is undercutting US beef production from US cattle.  This is not expected to slow anytime soon as world beef production is growing as well.  Learned this week, Argentinian cattle producers are being encouraged to grow their cattle larger to help meet export demand.  Mexico was handed all of US cattle production when the border was shut down, leaving many to wonder, which is worse, no fly, or no cattle?  US beef production is expected to increase as well.  A portion of the really long fed cattle are believed coming to market.  What we don't know, but have a pretty good idea of, is how many cattle are in under 1000 head nonreportable farmer/feeder yards we don't know about?  Although the top has taken a great deal longer to form than I ever thought, most of what has been anticipated, and preached about, is coming to fruition. Higher prices have encouraged alternative production from the beef/dairy cross, and influenced imports greatly.  Recently, price has begun impacting consumer demand, as only lower slaughter rates are keeping box beef prices buoyed.  An article this week showed grocery store butchers mixing small portions of pork to ground beef in order to help keep beef prices affordable after new highs in ground beef and the all fresh price made new highs this year. Rationing simply just took longer to materialize in this bull market than in other cycles, or commodities. What remains is the incentive to hold back heifers and grow the herd, instead of growing domestic and imported beef production. 

By Friday, I could no longer in good conscience recommend marketing at current basis level without the knowledge of how poor a marketing position this would place you in, and the increased amount of working capital.  As well, a position at the lower level will do nothing to help with the cash market until basis converges.  Participants that were proactive were rewarded this week as multiple recommendations had been laid out to benefit from just this type of price movement.  The lows on Friday offered a plethora of opportunities for all to participate in.  Hedged positions had opportunities to be rolled down, put options sold underneath, or call options purchased to capture the recent price movement. Producers looking to procure inventory were able to do so tens of dollars lower from cash or last week's trading. Producers that use LRP's as their derivative of choice, can buy call options if thoughts of higher prices still linger.  Were prices to move higher; this may help in securing open position equity.  Were prices to move lower; the risk is the premium paid for the call option.      

Most input costs were higher at weeks end.  Corn was higher and diesel fuel made, and closed, at new contract highs. I anticipate energy prices to continue higher, leading to keeping those farm tanks topped off to help average the price increase.  Farmers have an awful decision to make at this point.  Diesel is a dollar off the low made 6/18 and still $.91 from the spring high.  The only way I know to help with this is for you to calculate fuel at current price, and compare to a dollar lower or dollar higher and see which is worse. Bonds were a little firmer on the week, but there is not expected to be much change in rates. Government spending remains rampant, so I can't expect much change in the inflation rate.  

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