Beef Buzz News
Fed-Cattle Markets are Current for the First Time in About Two Years
Tue, 16 Nov 2021 10:47:12 CST
It looks like the cattle market is finally showing some response to the laws of supply and demand. Feedlot operators are gaining leverage, resulting in a rise in cash cattle prices. From here, Livestock Marketing Specialist Derrell Peel thinks the situation will continue to improve.
Listen to Ron's conversation with Dr. Peel here.
“There are a lot of things going on,” Peel said. “In the case of the fed-cattle market, it is really just allowing market fundamentals to act as they should in this marketplace.”
Peel said the artificial constraint came in the form of the COVID-19 pandemic affecting packer capacity all year. Now that the supply of live cattle is below capacity demand, the issue is no longer a binding constraint, he added.
Going forward, Peel said other U.S. cattle markets, including feeder cattle and wholesale beef markets, will begin to fall in line with the current fed-cattle market.
“They will all get re-synced, if you will, getting back in line with each other,” Peel said. “They have been artificially divorced all of this year, up to this point.”
Part of the market fundamentals Peel is talking about includes packers recently buying 119,000 head through negotiated trade, making it the biggest week of sales in 2021 and since the fall of 2020. As far as front-end supplies of cattle are concerned, the market is current right now.
As of now, there is no indication that inflation will throw a wrench into the positive movement for U.S. cattle markets.
“Certainly, you hear anecdotes about the (price) sticker shock on beef products,” Peel said. “But the inflation issue has different dimensions to it. It is obviously a macro-economic issue … but it is not part of (cattle) market fundamentals.”
At the same time, Peel said there is not much price movement where boxed beef is concerned.
“It is just kind of holding steady,” Peel said. “We do not look for a lot of movement - it might move up a little bit here as we move past Thanksgiving, into December.”
Click on the LISTEN BAR below to hear more from Ron Hays and Dr, Derrell Peel about the state of the U.S. cattle industry.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is 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.
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