Trump triggers fall in cattle futures

[Bob Juch]

KYLE, Texas - If the first casualty of war is truth, then the first casualties of trade war are the working man and woman. And first among them is about to be the iconic Texas rancher.

Here in the rolling pastures of bright, green spring grass at the edge of the Texas Hill Country, the handful of large spreads prosper from a wet winter. The short-horned Charolais breed, imported from France via Mexico, grow thick and wide, their white coats bright in the sunshine of impending spring. The Charolais makes for some of the finest grass-fed beef in the world. Now that a years-long drought has broken, ranchers can count on trucking in less of that expensive coastal grass they require in the dry months.

But the Texas cattle rancher now faces a new threat: the Trump administration's blundering, blustering trade policy. By threatening a trade war with Mexico within days of inauguration, the president helped trigger a slide in cattle futures. Mexico is a major export market. By sinking the Trans-Pacific Partnership, the new administration cut off long-sought access to the Japanese market. Now banks have raised the conditions for collateral for loans for ranchers.

Texas ranchers, though, will not be alone for long. Beef producers from Nebraska to the Dakotas face the same problems. So do grain farmers in Kansas and the snow-covered corn fields of Iowa, just like tomato farmers in California and Florida and autoworkers in Michigan, longshoremen, truckers and railway workers in Miami and Houston and Long Beach. These will be the first casualties of a trade war.

More: http://www.dallasnews.com/opinion/comme ... e-ranchers

[silverscreenselect]

Texas ranchers, though, will not be alone for long. Beef producers from Nebraska to the Dakotas face the same problems. So do grain farmers in Kansas and the snow-covered corn fields of Iowa, just like tomato farmers in California and Florida and autoworkers in Michigan, longshoremen, truckers and railway workers in Miami and Houston and Long Beach. These will be the first casualties of a trade war.

With the exception of California, all states that voted for Trump last year.

And does anyone other than the hard-core, alt-reality Trump supporters really think that the "tough negotiator" Trump is going to do anything other than bluster and eventually fold when he has to deal with people who actually have experience in international diplomacy.

[Beebs52]

Note "-opinion"

Note 2015 https://www.google.com/amp/www.forbes.c ... tmobile-us

Note 2016

https://www.google.com/amp/www.wsj.com/ ... tmobile-us

[BackInTex]

The writer should be a novelist. Probably is. Certainly not an economist.

[Beebs52]

Looks like cattle futures fall more than a professional personal injury claimant. Lotta cows out there. Get on it attorneys!

[Spock]

Texas ranchers, though, will not be alone for long. Beef producers from Nebraska to the Dakotas face the same problems. So do grain farmers in Kansas and the snow-covered corn fields of Iowa, just like tomato farmers in California and Florida and autoworkers in Michigan, longshoremen, truckers and railway workers in Miami and Houston and Long Beach. These will be the first casualties of a trade war.

With the exception of California, all states that voted for Trump last year.

And does anyone other than the hard-core, alt-reality Trump supporters really think that the "tough negotiator" Trump is going to do anything other than bluster and eventually fold when he has to deal with people who actually have experience in international diplomacy.

Obviously, the headline should read "We Hope Some Trump Voters in Red States Get Hurt"

I note the editorial did not mention the magnitude of the fall in cattle prices from January 2015 to November 2016.
http://www.extension.iastate.edu/AGDm/l ... /b2-12.pdf

The 32% fall in that time period has left a lot of people with red ink in the cattle business.

[silverscreenselect]

I note the editorial did not mention the magnitude of the fall in cattle prices from January 2015 to November 2016.
http://www.extension.iastate.edu/AGDm/l ... /b2-12.pdf

The 32% fall in that time period has left a lot of people with red ink in the cattle business.

Going by the top chart (the others are similar):

Iowa/Minnesota cattle prices January 2009: $83.15
December 2016: $112.93.

Let's see what the chart looks like in four years.

[Spock]

I note the editorial did not mention the magnitude of the fall in cattle prices from January 2015 to November 2016.
http://www.extension.iastate.edu/AGDm/l ... /b2-12.pdf

The 32% fall in that time period has left a lot of people with red ink in the cattle business.

Going by the top chart (the others are similar):

Iowa/Minnesota cattle prices January 2009: $83.15
December 2016: $112.93.

Let's see what the chart looks like in four years.

I question how much you know about the cattle business, but the rise in that time period to historic highs was mainly due to the Texas Drought. We have since significantly fallen because the effects of that have slowly been wrinkled out of the system Everything takes so long with the cattle business, because of the long time frames to take an animal from conception to slaughter.

I do not credit Obama for taking us to those historic highs, but I also do not blame him for the drop since. It is the nature of the business.

I had the flexibility to do some things differently in my cattle business in the 2015 high time-many did not and they are sucking air now.


I did find one thing from the article interesting.

>>>"part of a brisk two-way business that sees hundreds of thousands of Mexican cattle coming north to be fattened in Midwestern feed lots."<<<<

My informed guess is that the "Hundreds of Thousands of Mexican cattle coming north"-are slaughterhouse owned cattle that they use to lower the price they pay US farmers.

[BackInTex]

I question how much you know about the cattle business,

He knows enough to know where beef comes from.

[Estonut]

I question how much you know about the cattle business,

He knows enough to know where beef comes from.

85/15 is too expensive for him.

[Spock]

Me>>>I do not credit Obama for taking us to those historic highs, but I also do not blame him for the drop since. It is the nature of the business.<<<

Having said that, I would expect an editorial talking about future beef prices to at least acknowledge that recently prices have fallen significantly from historic highs. That info would provide needed context.

[Spock]

I have been trying to figure out how trade with Mexico (as described in the editorial) raises cattle prices in the US.

>>>"Last week, Texas ranchers shipped 1,430 cattle to Mexico, most to slaughter and to market. On an annual basis that's 74,000 head, part of a brisk two-way business that sees hundreds of thousands of Mexican cattle coming north to be fattened in Midwestern feed lots."<<<<

Obviously, both numbers are pulled completely from thin air, but you can only work with what they give you.

Per the article-we send 74,000 cattle to Mexico and they send hundreds of thousands to the US. How does that raise cattle prices here?

There is a group called R-Calf that, simply put, is kinda/sorta the Democrat wing of the cattle industry. They are well known for their stand that trade (as described in the editorial) lowers cattle prices here in the US.

https://www.r-calfusa.com/

[silverscreenselect]

I question how much you know about the cattle business,

You're right; I don't know much about the cattle business, but I do know that you're trying to blow smoke out both sides of your rear end here. The point of the column was that Trump's policies were causing cattle futures to drop. Rather than contest their argument, you did your usual "tut tut, what idiots these people are" routine and posted some chart. Here's your exact quote without the link:

I note the editorial did not mention the magnitude of the fall in cattle prices from January 2015 to November 2016. The 32% fall in that time period has left a lot of people with red ink in the cattle business.

Now the only reason to post a chart like that without any explanation is to imply that the drop in prices was due to something Obama did or did not do. I simply extrapolated to give a more complete view of what prices had done over the course of the Obama administration.

You fixated on one sentence in the column, ignoring the real gist. Let me quote that part of it to you:

But in the event of a trade war, all bets are off. A tariff here means retaliation by the Mexican government there, and the last time that happened, it was the United States that surrendered. In phasing in NAFTA in the early 2000s, Congress abruptly interrupted the movement of Mexican trucks north. The Mexicans retaliated with a crippling tariff on American tomato growers. The Republican Congress caved and today, Mexican trucks head north freely.

That's the point of the column. If Trump goes around willy nilly "getting tough," we're likely to see those countries limit imports from the U.S. And that hurts in two ways. It artificially softens the demand for U.S. products, and it encourages other countries, like the Australian beef mentioned, to aggressively go after these markets. And once they get a foothold, it will be tougher for U.S. companies in the future to get that lost ground back.

I'll admit again that I don't know all the ramifications of what a potential new deal with any of these countries. But I do know enough, based on the experience we've had with everything Donald Trump has done that I tend to doubt that, when the dust settles, he's going to be able to out-negotiate the Chinese, the Japanese, or even the Mexicans whom he loves to disparage. And a trade and tariff war, as long as it lasts, hurts anyone.

As you noted, cattle prices have dropped the last two years. But Trump said he was going to make things great again for those farmers, and there's nothing you've said or linked to that would support that theory in the slightest.

[silverscreenselect]

I question how much you know about the cattle business,

He knows enough to know where beef comes from.

85/15 is too expensive for him.

No, I just wait for them to mark some down at the grocery store.

[Bob78164]

But I do know enough, based on the experience we've had with everything Donald Trump has done that I tend to doubt that, when the dust settles, he's going to be able to out-negotiate the Chinese, the Japanese, or even the Mexicans whom he loves to disparage.

Gee, I dunno. Look at all the concessions Donny was able to wangle from the Chinese before he caved . . . surrendered . . . reversed course . . . reconsidered his rejection of a one-China policy. (Unless, of course, you count bribing him with valuable trademark rights in violation of the Emoluments Clause of the Constitution.) I'm sure they're quaking in their boots at the thought of taking him on again. --Bob

[Spock]

I note the editorial did not mention the magnitude of the fall in cattle prices from January 2015 to November 2016.
http://www.extension.iastate.edu/AGDm/l ... /b2-12.pdf

The 32% fall in that time period has left a lot of people with red ink in the cattle business.

Going by the top chart (the others are similar):

Iowa/Minnesota cattle prices January 2009: $83.15
December 2016: $112.93.

Let's see what the chart looks like in four years.

Unfortunately, it looks like lower cattle prices are already baked into the system 3 to 4 years out-regardless of what happens at the margins with trade.

Read a story yesterday in one of my trade papers that said 2016 was the 3rd year of a huge increase in the cow herd and 2016 alone saw a 3.5% increase in the cow herd. This is a large increase for the industry.

The new 2016 cows will join the existing herd and will be bred in the summer of 2017 with their first calves born in spring of 2018. These cattle will then go to slaughter in late 2019.

Cows live a long-time, I just sold one that was probably close to 20 and was still feeding a calf. So this cowherd increase over the last few years will likely weigh down cattle prices for several years.

[Spock]

>>>As you noted, cattle prices have dropped the last two years. But Trump said he was going to make things great again for those farmers, and there's nothing you've said or linked to that would support that theory in the slightest.<<<

I doubt that I have ever said that Trump will raise cattle prices. As my previous post said-the long-term nature of the cattle industry makes an increase unlikely.

Despite your fevered hopes that Trump supporting ranchers will be driven out of business and hit the bread lines it is very unlikely that, even if your fondest wishes come true that, said ranchers will be driven to the arms of Elizabeth Warren.

[silverscreenselect]

>>>As you noted, cattle prices have dropped the last two years. But Trump said he was going to make things great again for those farmers, and there's nothing you've said or linked to that would support that theory in the slightest.<<<

I doubt that I have ever said that Trump will raise cattle prices. As my previous post said-the long-term nature of the cattle industry makes an increase unlikely.

Despite your fevered hopes that Trump supporting ranchers will be driven out of business and hit the bread lines it is very unlikely that, even if your fondest wishes come true that, said ranchers will be driven to the arms of Elizabeth Warren.

Yes, but Trump was elected because he would "make America great again." So, to the extent that these same farmers and ranchers find themselves in the same boat, or a worse boat, two or four years from now, that's a failure of Trump. And there's a lot of people who are so ingrained that they'll never realize how self-defeating their votes are year after year. That's what keeps me employed right now, selling lottery tickets.

[Spock]

>>>As you noted, cattle prices have dropped the last two years. But Trump said he was going to make things great again for those farmers, and there's nothing you've said or linked to that would support that theory in the slightest.<<<

I doubt that I have ever said that Trump will raise cattle prices. As my previous post said-the long-term nature of the cattle industry makes an increase unlikely.

Despite your fevered hopes that Trump supporting ranchers will be driven out of business and hit the bread lines it is very unlikely that, even if your fondest wishes come true that, said ranchers will be driven to the arms of Elizabeth Warren.

Yes, but Trump was elected because he would "make America great again." So, to the extent that these same farmers and ranchers find themselves in the same boat, or a worse boat, two or four years from now, that's a failure of Trump. And there's a lot of people who are so ingrained that they'll never realize how self-defeating their votes are year after year. That's what keeps me employed right now, selling lottery tickets.

I hope that you are the general counsel, or whatever, for the Georgia Lottery Commission, because if you are literally selling lottery tickets-I question your ability to usefully assess the foolishness of the political opinions of multi-millionaires (at least on paper) as most ranchers are.