Beef Buzz News
Tonsor on Whether the Cattle Markets Have Hit Their Bottom
Tue, 22 Sep 2015 15:02:19 CDT
As we begin another market week, the cattle market continues to look mighty ugly. Oklahoma National Stockyards, a major trend setting market, had yearling steers and heifers $2 to $6 lower, along with steer and heifer calves $7 to $12 lower. Kansas State University Livestock Market Economist Glynn Tonsor said he has had lots of conversations in recent days with worried cattle producers. Cattlemen want to know if the cattle markets have hit their bottom.
"My general response of that is, I'm not sure if we've found the bottom or not, I'm not smart enough to peg the timing of that," Tonsor said. "But, I do think markets are like a pendulum."
Tonsor makes the analogy that markets are like an old grandfather clock that goes back and forth. He said economists are always trying to find that magic equilibrium, which never exists at one point in time. Supply and demand are pushing back and forth trying to find it. It begs the question, has the pendulum swung too far in this correction at the moment.
"I tend to be one that thinks demand signals aren't as bad, as they are being portrayed as," Tonsor said. "That's not to say, I don't think there's global economic concerns. I think there are, but I think they are being magnified more than they should be and that's weighed on the markets more in the last several weeks, than what we might otherwise anticipate."
So, maybe the cattle markets are close to the bottom in the short term. The U.S. cattle herd and beef supplies are going to grow going forward. In the short term, he said beef supplies are going to grow with heavier cattle are coming out of the system. Over the next couple of years, the U.S. will expand the herd, so tight cattle and beef supplies are eroding. That magnifies the demand story.
"I think the negative signals on demand are being a little over represented, if you like, in the market," Tonsor said. "That doesn't mean I outsmarted the market, but I think that pendulum may have swung too far, too bearish, too much, too quick, such that maybe we're toward the end of that correction period."
A couple of weeks ago, Oklahoma State University Extension Livestock Marketing Specialist Dr. Derrell Peel talked about how greed and fear influence the market and right now fear is definitely this marketplace. Dr. Tonsor agrees with that viewpoint. With his analogy of the pendulum swinging back and forth, Tonsor said we may be at one end of that pendulum swing, but it's not going to be an abrupt snap back to higher prices immediately. If last week the market reached its low, Tonsor said we would be naive to think the market will go back higher to May prices. He said maybe we will have a little renewal back from these correction points. So, the bottom line is the cattle market is close to the bottom, but it's hard to determine if the market is truly at its bottom.
This audio was provided by Kansas State University, as Tonsor was interviewed by Eric Atkinson of Agriculture Today. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Ron Hays Beef Buzzes with Glynn Tonsor of K-State
right-click to download mp3
WebReadyTM Powered by WireReady® NSI
Beef News
January Cattle on Feed Report Three Percent Under Year Ago- Derrell Peel Says Tighter Supplies Will Be Around for Awhile Mon, 23 Jan 2023 05:15:04 CST
Derrell Peel Talks Latest Cattle on Feed Report- Showing Fewer Cattle on Feed, Lighter Placements and Stronger Marketings. Mon, 26 Dec 2022 08:19:00 CST
Kara Lee with Certified Angus Beef Tells Cattlemen 'Cut the Bull' Fri, 23 Dec 2022 14:30:39 CST
Beef Checkoff Utilizes Digital Marketing Techniques to Interact with Consumers Thu, 22 Dec 2022 16:02:51 CST
Beef Checkoff Research, Education, and Promotion Efforts Point Consumers to Beef Wed, 21 Dec 2022 16:15:46 CST
OSU Economist Derrell Peel Expects US Beef Export Strength to Continue Into the New Year Tue, 20 Dec 2022 08:00:35 CST
NPPC's Michael Formica Feeling Positive About Supreme Courts Upcoming Proposition 12 Decision Mon, 05 Dec 2022 10:08:27 CST
NCBA Fights to Improve Marketing Options for Cattle Producers Fri, 02 Dec 2022 09:58:28 CST
Chinese Consumers Continue to Grow Appetite for U.S. Beef Thu, 01 Dec 2022 09:23:49 CST
Merck Creates Value for Producers and Consumers with Technology and Biopharmaceuticals Wed, 30 Nov 2022 09:55:28 CST
NCBA’s Todd Wilkinson Ready to Fight Back Against Regulatory Overreach in the Cattle Industry Tue, 29 Nov 2022 10:13:33 CST
NCBA and PLC Call ESA Listing Plan of Lesser Prairie Chicken Punitive for Cattle Producers in Southern Plains Wed, 23 Nov 2022 14:51:02 CST
November Cattle on Feed Report Confirms October Pattern of Lower Placements and Tighter Cattle Numbers in Feedlots Tue, 22 Nov 2022 05:07:02 CST
Turning the Corner- OSU's Derrell Peel Sees Tighter Cattle Inventories into 2023 in Latest Cattle on Feed Report Mon, 21 Nov 2022 04:36:33 CST
Turning the Corner- OSU's Derrell Peel Sees Tighter Cattle Inventories into 2023 in Latest Cattle on Feed Report Mon, 21 Nov 2022 04:27:40 CST
Midterm Elections to Set Stage for What Can Be Expected in 2023 Farm Bill Mon, 07 Nov 2022 12:13:57 CST
USMEF's Dan Halstrom Remains Cautiously Optimistic about Strong Beef Demand Going Forward Thu, 03 Nov 2022 09:35:46 CDT
Economic Factors Create Hesitancy in Beef Plant Expansion Plans Wed, 02 Nov 2022 11:03:34 CDT
NCBA's Mike Simone Says Consumer Interest in Fake Meat is on the Decline Tue, 01 Nov 2022 11:41:02 CDT
Beef Remains Valued Product for Consumers as it Allows Them to Stretch their Dollar Mon, 31 Oct 2022 09:15:56 CDT
Hugh Aljoe Provides Methods to Begin and Maintain Good Land Stewardship Fri, 28 Oct 2022 09:30:13 CDT
Implement Soil Health Practices Now to Increase Forage Production when Rains Come Thu, 27 Oct 2022 15:14:07 CDT
Third Beef. It's What's For Dinner. 300 Promotes the Beef Industry on a National Level Wed, 26 Oct 2022 15:32:23 CDT
Latest Cattle on Feed Report from USDA Implies Fewer Pounds of Beef Available in 2023 Tue, 25 Oct 2022 10:17:53 CDT
OSU's Derrell Peel- Lower Placements and Smaller On Feed Number Highlight October Cattle on Feed Report Sun, 23 Oct 2022 12:45:37 CDT
Beef Checkoff Research Continues to Share Beef Sustainability Story with Consumers Fri, 21 Oct 2022 09:23:36 CDT
Beef Checkoff Research Works to Ensure Consumers Beef is a Product They Can Trust Thu, 20 Oct 2022 13:44:44 CDT
Odds for Significant Wheat Pasture Going Lower Daily in the Southern Plains Wed, 19 Oct 2022 14:35:46 CDT
NCBA Weighs in on California's Proposition 12 Tue, 18 Oct 2022 11:32:24 CDT
2022 Stockyards Steak Out Takes Oklahoma Beef to the Next Level Mon, 17 Oct 2022 11:09:07 CDT
Holding Onto Your Cow Herd a Little Longer is Projected to Pay Off, says Randy Blach Fri, 14 Oct 2022 08:14:05 CDT
Randy Blach Confident in Better Cattle Market Conditions Down the Road Thu, 13 Oct 2022 09:43:02 CDT
No Imports or Exports Would Result in a Smaller U.S. Beef Cattle Industry Wed, 12 Oct 2022 16:11:15 CDT
Derrell Peel Explains Why International Trade of Beef is Valuable Tue, 11 Oct 2022 08:19:29 CDT
Animal Agriculture Hopeful for a Win as U.S. Supreme Court Looks at California's Proposition 12 Mon, 10 Oct 2022 09:26:17 CDT