The latest livestock trade data provides additional indication that the Mexican cattle industry is undergoing rapid and dynamic change. Changes in cattle and beef flows between the U.S. and Mexico have significant implications for the cattle industries on both sides of the border. The newest component of the increasingly complex and integrated U.S.-Mexico cattle and beef industries is the rapidly growing imports of Mexican beef into the U.S.

With the first half of the year behind us, it is useful to take a look at what has happened and the prospects for the second half of 2013. Beef demand has been and remains a crucial question, perhaps even more so in the second half of the year. Currently, Choice boxed beef prices are roughly $127 per hundredweight, about one dollar above prices at this time last year.  

Cattle and beef markets are still struggling to get on the same page. Fed cattle markets are groping for a summer bottom amidst seasonally large slaughter and beef production. Meanwhile feeder markets appear to have found a bottom after being on the defensive since February. Of course, part of the reason is that fed and feeder markets are looking at different factors at different points in time.

Higher grain prices, led by sharply increased demand for corn, have provoked a variety of adjustments in agricultural markets to restore a relative balance in crop and forage prices.

It is often the case in the cattle business that “when production is easy; marketing is hard” and “when production is hard; marketing is easy.” This makes sense because, when production is easy and everyone can do it, prices often drop and marketing profitably is a challenge and when production is a challenge, there are often good market opportunities.

Forage production in much of Oklahoma has been better than last year but conditions are deteriorating rapidly. Pastures and hay fields have almost stopped growing in many cases and this means that producers may be seeing all the forage they will have to work with unless conditions improve.