U.S. beef exports set a new record in 2014 and has the potential to go higher. At the recent Cattle Industry Convention in San Antonio, Texas, CattleFax CEO Randy Blach said the current level of beef export value back to cattle producers is over $300 per head and he believes that's not the ceiling.
"If we can produce more product and we will, we will export more product because more and more consumers around the world love what we produce," Blach said.
U.S. beef is gaining a reputation globally for being high quality beef. Blach said U.S. beef is deferiating itself from most of the other beef that is put on the global market. He is seeing premiums grow, which shows the U.S. brand is very powerful.
"As consumer incomes grow, so will their demand for high quality protein in their diet, whether its beef, pork, poultry, dairy products, etc. and I don't see that slowing anytime soon," Blach said.
American ag producers have job security in feeding a growing global population. Blach said we will see 78 million more people each and every year with over 800 million more people to feed over the next decade. Currently the U.S. and Brazil collectively export 50 percent of that protein. With a increasing population, he see this as a huge opportunity for U.S. producers.
High cattle prices are one of the reasons the U.S. had record levels for the value of beef exports this past year. In having higher prices, that also brings increased volatility and increased need for risk management. Blach said the amount of capital required to operate has never been greater. Additionally the amount of volatility in the market has never been greater.
"So, you bring those two things together in here, you start to understand that these markets move 20 to 21 percent from highs to lows during the course of a year," Blach said. "At today's fed cattle prices, that's $450 per head."
Click here to see more...