Cattle Prices Have Risen Only 1% This Year
"Bill," began a message from our farm manager in Argentina, "we are in the wrong business."
Yes, we are in the cattle business - in Argentina, no less. Cattle prices have risen only 1% this year. South of the Rio Plata, the cattle business is worse. Farmers have been getting rid of cattle so they can plant corn, soybeans and wheat. Result: cattle prices have fallen. Often, it's hard to find anyone who will even take the cows away. Why? Because buyers can't get them to market, since the grain farmers have blocked the roads into Buenos Aires.
That's the nice thing about being a grain farmer, you have time on your hands. You can hang around a roadblock...or go give your congressman a fright. Not so with dairymen and cattlemen. They've got to stay near their animals.
Yesterday, apparently, the blockades in Argentina were lifted...but we doubt we'll see much pick up in the beef market.
Bill Bonner
The Daily Reckoning Australia
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About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Comment by knowingisbeing known on 27 June 2008:
Why do you doubt a pick up in the beef market, surely it like all other foods will be impacted by inflation? Or is the world long beef and short everything else?
Comment by tom on 28 June 2008:
Grain farmers disrupt cattle supply chain = reduced beef supply.
Cattle farmers switching production to grain plantation = reduced beef supply
These factors are generally taken as in support of higher prices. Or has the world gone vegan overnight??
Comment by Pete on 29 June 2008:
I don't know of any farmers changing from cattle to crops in Australia