More Volatility Ahead for Cattle Markets

Randall Weiseman Cattle, Livestock

cattlefaxCattlefax CEO Randy Blach recently spoke at the Kansas Livestock Convention about volatility in the cattle markets, including what’s causing the downturn and what to expect in the months ahead.

Cattle producers have recently seen higher prices after a two-year price drop of more than 40 percent. An Ag Web dot com article says 750-800 pound steers brought $125.19 per hundredweight last month. Prices climbed to $134.38 last week. However, Blach said the rally may not last much longer.

“This is not about cattle, but more part of a global slowdown,” he said.

The bull market for commodities started in 2009 at the end of the global financial crisis. Crop farmers and livestock producers all raised their production efforts before things went in the negative direction starting in 2012. From August 2012-2016, corn prices dropped 60 percent and soybeans were 47 percent lower. Fed cattle prices followed crops lower, dropping 43 percent since November of 2014. The cattle industry has seen huge price swings from the highs in 2014 to this year’s low prices. Steer calves weighing 550 lb. averaged $911 in losses from the cycle high, with 750 lb. feeder steers falling $941.

Blach adds, “Commodity cycles are a good reminder of how quickly things can change.”

(From the National Association of Farm Broadcasters News Service)