October 5, 2018 Tennessee Market Highlights Number: 40

FED CATTLE: Fed cattle traded steady com-pared to last week. Prices on a live basis were mainly $110 to $111 while prices on a dressed basis were mainly $174 to $175. The 5-area weighted average prices thru Thursday were $110.56 live, up $0.19 from last week and $174.82 dressed, up $0.80 from a week ago. A year ago prices were $108.74 live and $170.00 dressed. The weekly 5-area weighted average price the previous three weeks has traded in a range from $110.62 to $110.67. Once end of the week trades are completed, it does not appear this week’s price will be much different than the prior three weeks and it will only be $1 higher than the same week one year ago. Thus the past month of fin-ished cattle trade mirrors the steadiness of the market since the middle of May. Since the middle of May the live cattle market has ranged from $107 to nearly $115 with an average near $110.50. One would have to go back to the summer of 2013 to find a narrower cash trading range over as long of a time period as the market since May. This could be a good indication of reduced vola-tility in the market and a steady state. BEEF CUTOUT: At midday Friday, the Choice cutout was $203.67 down $0.19 from Thursday and down $0.71 from last Friday. The Select cutout was $191.97 down $0.01 from Thursday and down $1.62 from last Friday. The Choice Select spread was $11.70 compared to $10.79 a week ago. Wholesale beef prices seasonally come under pressure in late September and Octo-ber as consumers move away from summer routines. How prices move is dependent on supply and demand. Demand for beef has been strong domestically and international-ly. Similarly, supply of beef and other meats has been increasing the past few years, and it is expected to continue increasing. Based on USDA numbers and calculations, per capita U.S. red meat and poultry consump-tion totaled 215 pounds per person in 2017 which was 15 pounds higher than 2014 and

the highest level since 2007. Projections are for per capita red meat and poultry con-sumption to be close to 220 pounds in 2019 and 2020 which is a very similar total com-pared to 2002 through 2007. What is not similar is the breakdown between beef, pork, and chicken. In 2007, per capital beef, pork, and chicken consumption totaled 65, 51, and 86 pounds respectively. Expecta-tions moving into 2019 are beef at 58 pounds, pork at 52 pounds, and chicken at 95 pounds. These values account for pro-duction plus imports minus exports. OUTLOOK: October in the Southeastern United States has arrived and the weather conditions this week and next appear to be the second coming of August as tempera-tures are forecast in the 90s and the humid-ity is expected to remain high. Despite high temperatures, cattle producers across Ten-nessee welcomed October by setting wheels under several calves and cull cows this week with several auction markets run-ning in high gear. The drier conditions pro-vided producers the opportunity to get the trailer in the field while fairly strong market prices for calves and feeder cattle encour-aged producers to take advantage of the situation. Compared to last week’s Tennes-see weekly auction average, steer prices this week were steady to $4 lower while heifer prices were $1 to $2 higher. The 500 to 600 pound steer price averaged $150 per hundredweight this week which is $8 high-er than the same week one year ago but $18 lower than the five year average. One aspect of this market to consider is that 500 to 600 pound steer calf prices have been hovering in the low $150s since the middle of May. It would appear they have a clear direction and that direction is steady, but prices will be pressured as more calves are brought to town. Similar to lighter weight steers, 700 to 800 pounds steer prices trad-ed at $139 per hundredweight this week which is $5 higher than the same week last year. At this time, it does not appear that

(Continued on page 2)

Livestock Comments by Dr. Andrew P. Griffith Trends for the Week Compared to a Week Ago

Slaughter Cows

$1 to $4 lower

Slaughter Bulls

$2 to $3 lower

Feeder Steers

steady to $4 lower

Feeder Heifers

$1 to $2 higher

Feeder Cattle Index

Wednesday’s index: 157.81

Fed Cattle

The 5-area live price of $110.56 was up $0.19. The dressed price of $174.82 was up $0.80.

Corn

December closed at $3.68 a bush-el, up 12 cents since last Friday.

Soybeans

November closed at $8.69 a bush-el, up 24 cents since last Friday.

Wheat

December closed at $5.21 a bush-el, up 12 cents since last Friday.

Cotton

December closed at 76.1 cents per lb, down 0.27 cents since last Fri-day.

2

feeder cattle prices are going to come under pressure in the near term. Contrary to the current feeder cattle market, the slaughter cow and bull market are seasonally faltering. The av-erage slaughter cow price in Tennessee this week was $1 to $4 lower compared to last week while slaughter bull prices were $2 to $3 lower. These prices will only get softer as more cows and bulls move to slaughter. It may be wise to market them sooner rather than later if one plans to market them prior to the end of the year. ASK ANDREW, TN THINK TANK: Instead of answering a ques-tion in this section this week, a question will be asked. The Ten-nessee Market Highlights publication is published 51 weeks out of the year and has been a mainstay for many years. Dr. Aaron Smith and I have been challenged by our department head to examine changes that can be made to the publication to reduce the work hours that go into this effort. Such changes may in-clude removing certain portions of the publication, adding web-site links to material that is in the publication so we are not just reporting information that is elsewhere, and so on. With that in mind, I would like to get feedback from the readers to see what items we provide are necessary and what we can stop publish-ing. The purpose of this publication is to help producers and industry professionals stay on top of commodity markets, and we want to exceed expectations. Please shoot me an email with suggestions. Please send questions and comments to agriff14@utk.edu or send a letter to Andrew P. Griffith, University of Tennessee, 314B Morgan Hall, 2621 Morgan Circle, Knoxville, TN 37996. FRIDAY’S FUTURES MARKET CLOSING PRICES: Friday’s closing prices were as follows: Live/fed cattle –October $113.80 +0.18; December $118.15 -0.23; February $122.53 -0.05 Feeder cattle –October $157.78 +0.80; November $158.23 +0.48; January $154.38 -0.13; March $153.45 +0.08; December corn closed at $3.68 up $0.01 from Thursday.

(Continued from page 1)

Livestock Comments by Dr. Andrew Griffith

Thursday, October 4, 2018

Month Class III Close Class IV Close

Oct 15.82 15.25

Nov 16.01 15.29

Dec 15.98 15.14

Jan 15.86 15.07

Feb 15.76 15.19

Milk Futures

Cattle Hogs

———— Number of head ————

This week (4 days) 119,500 468,250

Last week (4 days) 119,500 470,750

Year ago (4 days) 115,500 456,250

This week as percentage of

Week ago (%) 100% 99%

Year ago (%) 103% 103%

Average Daily Slaughter USDA Box Beef Cutout Value

Choice 1-3 600-900 lbs

Select 1-3 600-900 lbs

———————— $/cwt —-———————

Thursday 203.86 191.98

Last Week 204.71 192.56

Year ago 197.41 189.55

Change from week ago -0.85 -0.58

Change from year ago +6.45 +2.43

3

Crop Comments by Dr. Aaron Smith

Overview Corn, soybeans, and wheat were up; cotton was down for the week.

A good bounce back week for grain and oilseed futures prices after last week’s bearish USDA stocks report. The rally this week was partially driven by a new trade deal (USMCA formally NAFTA) with Canada and Mexico as well as har-

vest weather concerns across the Midwest. As harvest progresses it remains unlikely that a significant rally in soybean or corn cash prices occurs - due primarily to the size of this year’s crop - without movement in a trade deal with China, which does not appear to be forthcoming. As such, producers should consider storage or delayed pricing alternatives that can extend the marketing interval.

In September, compared to last year, December corn futures averaged $0.05 higher ($3.58 compared to $3.53); November soy-bean futures averaged $1.27 lower ($8.39 compared to $9.66); December cotton futures averaged 9.98 cents higher (80.36 com-pared to 70.38); and July wheat futures averaged $0.43 higher ($4.92 compared to $4.48).

In Tennessee, September 2017 average corn basis was 21 under compared to 25 under in 2018 and average soybean basis in 2017 was 20 under compared to 61 under in 2018. As a result, corn cash prices in September averaged 1 cent higher versus $1.68 lower for soybean cash prices. This is a remarkable change in the relative value of the crops in one year. The principal driver of the dra-matic change in relative prices has been the trade disruption with China.

Corn

Across Tennessee, average corn basis (cash price-nearby futures price) strengthened or remained unchanged at Memphis, North-west Barge Points, Northwest, Upper-middle, and Lower-middle Tennessee. Overall, basis for the week ranged from 31 under to 5 under the December futures contract with an average of 17 under at the end of the week. December 2018 corn futures closed at $3.68, up 12 cents since last Friday. For the week, December 2018 corn futures traded between $3.56 and $3.69. Corn net sales reported by exporters from September 21-27 were within expectations with net sales of 56.3 million bushels for the 2018/19 mar-keting year. Exports for the same time period were up 4% compared to last week at 55.4 million bushels. Corn export sales and commitments were 32% of the USDA estimated total annual exports for the 2018/19 marketing year (September 1 to August 31) compared to a 5-year average of 29%. Ethanol production for the week ending September 28 was 1.015 million barrels per day, down 21,000 from the previous week. Ethanol stocks were 23.445 million barrels, up 816,000 barrels. Dec/Mar and Dec/Dec future spreads were 12 and 32 cents, respectively.

The Crop Progress report estimated corn condition at 69% good-to-excellent and 12% poor-to-very poor; corn mature at 86% com-pared to 72% last week, 66% last year, and a 5-year average of 71%; and corn harvested at 26% compared to 16% last week, 16% last year, and a 5-year average of 17%. In Tennessee, corn condition was estimated at 73% good-to-excellent and 2% poor-to-very poor; corn mature at 97% compared to 93% last week, 96% last year, and a 5-year average of 95%; and corn harvested at 64% com-pared to 60% last week, 72% last year, and a 5-year average of 67%. In Tennessee, January 2019 corn cash forward contracts aver-aged $3.75 with a range of $3.62 to $3.91. March 2019 corn futures closed at $3.80, up 12 cents since last Friday. December 2019 corn futures closed at $4.00, up 9 cents since last Friday. Downside price protection could be obtained by purchasing a $4.10 De-cember 2019 Put Option costing 32 cents establishing a $3.78 futures floor.

(Continued on page 4)

4

Crop Comments by Dr. Aaron Smith

Soybeans

Average soybean basis strengthened or remained unchanged at Memphis, Northwest Barge Points, Lower-middle, Upper-middle, and Northwest Tennessee. Basis ranged from 80 under to 38 under the November futures contract at elevators and barge points. Average basis at the end of the week was 55 under the November futures contract. November 2018 soybean futures closed at $8.69, up 24 cents since last Friday. For the week, November 2018 soybean futures traded between $8.43 and $8.70. Net sales re-ported by exporters were above expectations with net sales of 55.9 million bushels for the 2018/19 marketing year and 0.1 million bushels for the 2019/20 marketing year. Exports for the same period were down 12% compared to last week at 26.5 million bush-els. Soybean export sales and commitments were 41% of the USDA estimated total annual exports for the 2018/19 marketing year (September 1 to August 31), compared to a 5-year average of 59%. Nov/Dec 2018 soybean-to-corn price ratio was 2.36 at the end of the week.

Nov/Jan and Nov/Nov future spreads were 13 and 66 cents, respectively. The Crop Progress report estimated soybean condition at 68% good-to-excellent and 10% poor-to-very poor; soybeans dropping leaves at 83% compared to 71% last week, 78% last year, and a 5-year average of 75%; and soybeans harvested at 23% compared to 14% last week, 20% last year, and a 5-year average of 20%. In Tennessee, soybean condition was estimated at 74% good-to-excellent and 5% poor-to-very poor; soybeans dropping leaves at 67% compared to 60% last week, 68% last year, and a 5-year average of 64%; and soybeans harvested at 18% compared to 16% last week, 13% last year, and a 5-year average of 16%. In Tennessee, Jan 2019 soybean cash contracts average $8.44 with a range of $8.39 to $8.51. January 2019 soybean futures closed at $8.82, up 23 cents since last Friday. November 2019 soybean fu-tures closed at $9.35, up 23 cents since last Friday. Downside price protection could be achieved by purchasing a $9.40 November 2019 Put Option which would cost 60 cents and set an $8.80 futures floor. Nov/Dec 2019 soybean-to-corn price ratio was 2.34 at the end of the week.

Cotton

Delta upland cotton spot price quotes for October 4 were 74.75 cents/lb (41-4-34) and 76.5 cents/lb (31-3-35). Adjusted World Price (AWP) decreased 2.07 cents to 67.87 cents. Net sales reported by exporters were down from last week at 21,800 bales for the 2018/19 marketing year and 91,100 for the 2019/20 marketing year. Exports for the same time period were 179,700 bales, up 29% from last week. Upland cotton export sales were 62% of the USDA estimated total annual exports for the 2018/19 marketing year (August 1 to July 31), compared to a 5-year average of 44%.

(Continued on page 5)

5

Crop Comments by Dr. Aaron Smith

The Crop Progress report estimated cotton condition at 42% good-to-excellent and 25% poor-to-very poor; cotton opening bolls at 67% compared to 58% last week, 66% last year, and a 5-year average of 67%; and cotton harvested at 19% compared to 16% last week, 17% last year, and a 5-year average of 13%. In Tennessee, cotton condition was estimated at 73% good-to-excellent and 8% poor-to-very poor; cotton bolls opening at 95% compared to 93% last week, 75% last year, and a 5-year average of 70%; and cotton harvested at 14% compared to 10% last week, 4% last year, and a 5-year average of 5%. December 2018 cotton futures closed at 76.1, down 0.27 cents since last Friday. For the week, December 2018 cotton futures traded between 75.37 and 77.2 cents. Dec/Mar and Dec/Dec cotton futures spreads were 1.04 cents and -0.35 cents, respectively. March 2019 cotton futures closed at 77.14, down 0.15 cents since last Friday. December 2019 cotton futures closed at 75.75, down 0.02 cents since last Friday. Downside price protection could be obtained by purchasing a 76 cent December 2019 Put Option costing 5.1 cents establishing a 70.9 cent futures floor.

Wheat

Wheat net sales reported by exporters were within expectations with net sales of 16 million bushels for the 2018/19 marketing year. Exports for the week were down 34% compared to last week at 11.7 million bushels. Wheat export sales were 41% of the USDA estimated total annual exports for the 2018/19 marketing year (June 1 to May 31), compared to a 5-year average of 59%. The Crop Progress report estimated winter wheat planted at 43% compared to 28% last week, 34% last year, and a 5-year average of 40%; and winter wheat emerged at 14% compared to 10% last year and a 5-year average of 14%. In Tennessee, winter wheat planted was estimated at 11% compared to 9% last week, 4% last year, and a 5-year average of 5%; and winter wheat emerged at 6% compared to 1% last year.

December 2018 wheat futures closed at $5.21, up 12 cents since last Friday. December 2018 wheat futures traded between $5.05 and $5.27 this week. December wheat-to-corn price ratio was 1.42. Dec/Mar and Dec/Jul future spreads were 19 cents and 34 cents, respectively. March 2019 wheat futures closed at $5.40, up 13 cents since last Friday. In Tennessee, June/July 2019 wheat cash contracts ranged from $5.24 to $5.65 for the week. July 2019 wheat futures closed at $5.55, up 15 cents since last Friday. Downside price protection could be obtained by purchasing a $5.60 July 2019 Put Option costing 41 cents establishing a $5.19 fu-tures floor.

Additional Information: Links for data presented: U.S. Export Sales - https://apps.fas.usda.gov/export-sales/esrd1.html USDA FAS: Weekly Export Performance Indicator – https://apps.fas.usda.gov/esrquery/esrpi.aspx EIA: Weekly ethanol Plant Production - https://www.eia.gov/dnav/pet/pet_pnp_wprode_s1_w.htm EIA: Weekly Supply Estimates - https://www.eia.gov/dnav/pet/pet_sum_sndw_a_EPOOXE_sae_mbbl_w.htm Upland Cotton Reports - https://www.fsa.usda.gov/FSA/epasReports?area=home&subject=ecpa&topic=fta-uc Tennessee Crop Progress - https://www.nass.usda.gov/Statistics_by_State/Tennessee/Publications/Crop_Progress_&_Condition/ U.S. Crop Progress - http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1048 USDA AMS: Market News - https://www.ams.usda.gov/market-news/search-market-news

If you would like further information or clarification on topics discussed in the crop comments section or would like to be added to our free email list please contact me at aaron.smith@utk.edu.

6

Friday, September 28, 2018 — Thursday, October 4, 2018

Commodity Contract Month Friday Monday Tuesday Wednesday Thursday

Soybeans Nov 8.45 8.57 8.66 8.61 8.59

($/bushel) Jan 8.59 8.71 8.80 8.75 8.73

Mar 8.72 8.84 8.92 8.89 8.86

May 8.85 8.97 9.05 9.02 8.99

Jul 8.96 9.07 9.16 9.13 9.11

Aug 9.00 9.11 9.20 9.17 9.15

Corn Dec 3.56 3.65 3.67 3.64 3.67

($/bushel) Mar 3.68 3.77 3.79 3.76 3.79

May 3.75 3.85 3.87 3.84 3.886

Jul 3.81 3.90 3.92 3.89 3.91

Sep 3.85 3.93 3.95 3.93 3.95

Dec 3.91 3.99 4.00 3.98 4.00

Wheat Dec 5.09 5.09 5.19 5.15 5.18

($/bushel) Mar 5.27 5.28 5.38 5.34 5.36

May 5.38 5.41 5.49 5.46 5.47

Jul 5.40 5.44 5.54 5.52 5.53

Sep 5.51 5.56 5.67 5.65 5.66

Soybean Meal Oct 305 310 311 307 308

($/ton) Dec 309 313 315 311 312

Jan 309 313 315 312 312

Mar 308 312 314 311 311

May 306 310 313 310 310

Jul 308 312 314 311 312

Cotton Oct 76.76 76.70 76.58 76.85 76.39

(¢/lb) Dec 76.37 76.31 76.19 76.46 76.00

Mar 77.29 77.05 76.92 77.20 76.82

May 78.14 77.87 77.75 77.97 77.69

Jul 78.94 78.71 78.61 78.73 78.46

Live Cattle Oct 113.45 113.67 113.97 113.20 113.62

($/cwt) Dec 118.85 118.95 119.47 118.40 118.37

Feb 122.80 123.25 123.72 122.75 122.57

Apr 123.90 124.47 124.85 124.00 123.70

Jun 116.67 117.35 1147.45 116.60 116.32

Feeder Cattle Sep 156.89 ——— ——— ——— ———

($/cwt) Oct 158.17 158.65 159.07 157.87 156.97

Nov 158.05 159.02 159.57 158.77 157.75

Jan 154.65 156.02 156.45 155.50 154.50

Mar 153.30 154.82 155.42 154.30 153.37

Apr 153.57 155.00 155.60 154.62 153.75

Market Hogs Oct 62.17 64.75 66.42 67.47 67.50

($/cwt) Dec 57.92 59.85 59.15 57.15 55.32

Feb 65.85 67.82 67.80 66.25 64.72

Apr 70.02 71.67 71.65 70.37 69.25

May 75.12 75.32 76.05 74.90 74.20

Futures Settlement Prices: Crops & Livestock

7

Cattle Receipts: This week: 10,064 (10) Week ago: 6,245 (9) Year ago: 9,884 (11)

This Week Last Week Year Ago

Low High Weighted Average Weighted Average Weighted Average

—————————————————————— $/cwt ——————————————————————

Steers: Medium/Large Frame #1-2

300-400 lbs 150.00 187.50 164.62 171.08 159.14

400-500 lbs 145.00 170.00 158.28 158.16 151.89

500-600 lbs 130.00 165.00 150.28 151.54 140.08

600-700 lbs 122.50 155.00 142.38 144.28 138.37

700-800 lbs 128.00 150.00 139.42 138.73 131.44

Steers: Small Frame #1-2

300-400 lbs 145.00 156.00 152.16 148.86 140.91

400-500 lbs 120.00 146.00 134.45 141.81 136.04

500-600 lbs 114.00 140.00 128.81 ——— 123.28

600-700 lbs 132.00 135.00 133.48 125.41 115.70

Steers: Medium/Large Frame #2-3

300-400 lbs 135.00 166.00 150.72 148.23 144.52

400-500 lbs 129.00 153.00 141.85 143.51 136.24

500-600 lbs 125.00 153.00 139.15 142.84 127.54

600-700 lbs 119.00 142.00 131.46 136.02 124.37

700-800 lbs 124.00 137.00 130.72 124.78 113.89

Holstein Steers

300-400 lbs ——— ——— ——— ——— 94.56

500-600 lbs ——— ——— ——— ——— 81.24

700-800 lbs ——— ——— ——— ——— 79.69

Slaughter Cows & Bulls

Breakers 75-80% 40.50 47.03 48.42 49.22 54.00

Boners 80-85% 48.29 52.02 53.48 39.00 56.50

Lean 85-90% 33.00 50.00 43.12 44.39 47.14

Bulls YG 1 64.50 82.50 72.23 74.93 76.33

Heifers: Medium/Large Frame #1-2

300-400 lbs 117.50 172.50 144.76 143.31 137.42

400-500 lbs 115.00 152.50 137.61 137.67 132.93

500-600 lbs 112.50 143.00 131.31 130.25 127.40

600-700 lbs 108.00 137.00 128.50 126.61 123.59

Heifers: Small Frame #1-2

300-400 lbs 122.50 132.50 128.20 ——— 122.93

400-500 lbs 110.00 135.00 121.60 130.34 117.37

500-600 lbs 107.00 128.00 115.52 120.58 98.51

600-700 lbs ——— ——— ——— 107.93 107.02

Heifers: Medium/Large Frame #2-3

300-400 lbs 120.00 148.00 132.07 134.37 128.56

400-500 lbs 108.00 138.00 127.84 129.20 125.08

500-600 lbs 110.00 131.00 121.54 123.25 117.75

600-700 lbs 105.00 131.00 119.64 120.55 113.37

Prices on Tennessee Reported Livestock Auctions for the week ending October 5, 2018

8

Friday, September 28, 2018 — Thursday, October 5, 2018

Friday Monday Tuesday Wednesday Thursday

Low High Low High Low High Low High Low High

———————–——————————————— $/bushel ———————————————————–———

No. 2 Yellow Soybeans

Memphis 7.97-8.00 8.11-8.19 8.18-8.28 8.21-8.23 8.17-8.21

N.W. B.P. 7.87-7.91 8.00-8.04 8.08-8.16 8.07-8.12 8.07-8.12

N.W. TN ——— 7.87-7.84 7.86-7.91 7.82-7.87 7.79-7.96

Upper Md. 7.75-7.92 7.99-8.05 8.07-8.17 8.02-8.11 8.00-8.10

Lower Md. ——— ——— ——— ——— ———

Yellow Corn

Memphis 3.42-3.44 3.55-3.55 3.57-3.57 3.54-3.59 3.57-3.62

N.W. B.P. 3.36-3.38 3.45-3.50 3.48-3.53 3.50-3.52 3.53-3.55

N.W. TN 3.26-3.31 3.35-3.45 3.42-3.48 3.39-3.45 3.42-3.52

Upper Md. 3.21-3.26 3.35-3.38 3.37-3.40 3.34-3.37 3.38-3.41

Lower Md. ——— ——— ——— ——— ———

Wheat

Memphis ——— ——— ——— ——— ———

Prices Paid to Farmers by Elevators

100

120

140

160

180

200

220

Tennessee 500-600 lbs. M-1 Steer Prices2017, 2018 and 5-year average

2012/2016 Avg 2017 2018

85

105

125

145

165

185

Tennessee 700-800 lbs. M-1 Steers Prices2017, 2018 and 5-year average

2012/ 2016 Avg 2017 2018

8595

105115125135145155

5-Area Finished Cattle Prices2017, 2018 and 5-year average

2012/2016 Av g 2017 2018

35455565758595

105

Tennessee Slaughter Cow PricesBreakers 75 -80%

2017, 2018 and 5-year average

1.00 2017 2018

9

East Tennessee Livestock Center - October 3, 2018 1 load out of 110 Holstein steers; est. wt. 900 lbs.; 100% #1s; medium flesh; $90.25 Hardin County Stockyard - October 3, 2018 1 load of 88 heifers, 573 lb, M&L 1-2, Black/BWF Red/RWF CHX, 4-5 flesh, 155.00 2 load s of 127 heifers, 676 lb, M&l 1-2, mixed color, 4-5 flesh, $147.85 1 load of 69 steers, 706 lb, M&L 1, Black/BWF CHX, 5 flesh, $160.85 1 load of 70 steers, 755 lb, M&L 1, Black/BWF CHX, 5 flesh, $156.00 1 load of 60 steers, 824 lb, M&L 1, Black/BWF Red/RWF CHX, 5-6 flesh, $152.95 TLP Beef Alliance Sale, Columbia, TN Weighted Average Report for Tuesday Oct 2, 2018 Cattle Receipts: 828 For complete report: https://www.ams.usda.gov/mnreports/nv_ls188.txt Warren Co. Livestock Graded Sale, McMinnville, TN Weighted Average Report for Wednesday Oct 3, 2018 Cattle Receipts: 1267 For complete report: https://www.ams.usda.gov/mnreports/nv_ls189.txt

10/02/2018 TN Livestock Producers Fayetteville Receipts: 508 (166 graded & grouped) Steers: Med & Lg 1-2 Heifers: Med & Lg 1-2 300-400 lbs 162.00-164.00 300-400 lbs 400-500 lbs 144.00-146.00 400-500 lbs 125.00-134.00 500-600 lbs 146.00-158.00 500-600 lbs 123.00-132.00 600-700 lbs 152.50 600-700 lbs 126.00-129.00 700-800 lbs 144.50 800-900 lbs Bulls: Med & Lg 1-2 400-500 lbs 147.00-156.00 500-600 lbs 143.00-147.00 600-700 lbs 130.00 700-800 lbs 132.00 10/01/2018 Morris Brothers Stockyard, Pikeville, TN Receipts: 160 Last Week: 81 Last Year: 166 Steers: Heifers: 250-299 lbs 152.50 250-299 lbs 152.50 300-349 lbs 150.00 300-349 lbs 122.50-142.50 400-449 lbs 137.50-144.00 350-399 lbs 125.00-140.00

450-499 lbs 126.00-135.00 400-449 lbs 121.00-136.00 500-549 lbs 126.00-135.00 450-499 lbs 119.00-128.00 550-599 lbs 120.00-127.00 500-549 lbs 112.50-133.00 600-699 lbs 121.00-138.00 550-599 lbs 107.50-122.00 700-799 lbs 120.00-121.00 600-699 lbs 120.00-122.00 700-799 lbs 122.00 Bulls: 400-449 lbs 140.00 450-499 lbs 500-549 lbs 122.00-136.00 550-599 lbs 116.00-130.00 600-699 lbs 128.00 Other: Head Cows: $350.00-$925.00 Head Bulls: $1175.00-$1325.00 Slaughter Cows (Under 900): 28.00-100.00 Slaughter Cows (over 900 lbs): 33.50-57.00 Slaughter Bulls (901-1500 lbs): 72.50 Slaughter Bulls (over 1500): 69.50-70.50

Graded Sales, Video Board Sales, Video Sales & Loads Self-Reported and Self-Graded Markets

Self-Reported and Self-Graded Markets

10

Nalivka: USMCA Completed And Asia Trade Looking Even Better John Nalivka, Sterling Marketing October 4, 2018

Trade is the hot topic this week as the Trump Administration completed a new agreement with Mexico and Canada to re-place NAFTA – the U.S.-Mexico-Canada Agreement (USMCA). Canada signed the agreement on September 30th as a U.S. im-posed deadline neared the 11th hour. Non-tariff exports of U.S. beef and pork to Mexico and Canada remain in place and the red meat industry can now move forward with certainty toward our expanding North American trade opportunities. That said, the U.S. Meat Export Federation (USMEF), though also applauding the agreement, did express concern with the continued retaliatory tariffs kept in place by both Mexico and Canada in response to U.S. steel and aluminum tariffs.

So, let’s talk trade. The USMCA is definitely important. I have said that since President Trump first made mention of renegoti-ating the 23-year-old North American Free Trade Agreement. But, I also expressed that same opinion when asked about Chi-na trade – NAFTA is the priority. Why did I say that? Beef ex-ports to China so far this year (January-July) account for 1% of U.S. exports in volume and 1% in value. This does not account for product exported to other Asian countries and trans-shipped to China, and that’s another story!

By comparison to China, Mexico accounts for 13% of total U.S. beef exports and 11% of the value of those exports, while Can-ada accounts for 10% of total beef shipments and 11% of the value of exported beef. So, our partners in the USMCA repre-sent about 25% of our total U.S. beef export business in both volume and value. U.S. beef exports were valued at $7.3 billion last year, while U.S. pork exports were valued at $6.2 billion! That’s part of the story.

Beyond Canada and Mexico, our primary trading partners for U.S. beef and pork in Asia are Japan and South Korea. This year, 27% of U.S. beef exports have gone to Japan at a value repre-senting 24% of the total value of those total exports. For U.S. beef shipped to South Korea, the volume and value both repre-sent 22% of our total beef exports. Together with Canada and Mexico, these four countries account for 73% of total U.S. beef going into global markets, and 67% of the value. In addition, the recently completed U.S. – Japan Free Agreement not only

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will lower tariffs for U.S. beef and pork, it will greatly enhance the opportunity for the U.S. to negotiate and participate in free trade agreements across Asia, including the ongoing Trans Pa-cific Partnership. This far surpasses any singularly focused trade opportunity with China under their one-sided stipulations - in my opinion. China’s Belt and Road Initiative is not a free market plan.

As an economist, I am absolutely an advocate of free trade with the qualifications of fair and reciprocal with American indus-tries and consumers at the forefront. The U.S. economy is strong and will likely remain so for the foreseeable future as the result of lower taxes and reduced regulatory burden. The economic environment could not be better for negotiating trade that will benefit U.S. agriculture into the future.

Department of Agricultural and Resource Economics 314 Morgan Hall • 2621 Morgan Circle

arec.tennessee.edu USDA / Tennessee Department of Agriculture Market News Service http://www.tennessee.gov/agriculture/article/ag-farms-market-news 1-800-342-8206