Overwhelmingly, the most important factor remains the long-term foundation for beef demand
Mid-year always serves as an appropriate time to reflect while looking ahead to the remainder of the year. That said, January's Monthly Market Profile began with a proclamation of my favorite presentation slide about the general shape of the economy: "We're in a dark wood and the way is not straight." This year would be characterized by uncertainty: the "overarching theme in 2010 is resilience - we're in the hedgerows fighting our way out to some open ground."
However, the turn of the year provided some hope for better days: first, the trough of the recession appeared to be past and, second, beef supply would become relatively tight in the coming months. Those dynamics played out during the first half of the year. Producers have been the beneficiaries of surging cattle prices in recent months. Most importantly, that's boosted topline growth and allowed revenue trends to reverse direction from 2009's downturn - the first six months of 2010 has feedyards approximately $1 billion ahead of last year. Much of that revenue stream has benefitted the cow-calf and stocker segments. Meanwhile, for the first time in several years, cattle feeders have actually experienced some black ink on their closeouts.
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