Pressure from Fundamentals, Nonstop Muddy Feedlot Conditions Finally Catches Up to the MarketsThu, 13 Dec 2018 12:09:20 CST
This week has been better for calf and yearling prices, but last week was simply brutal for producers at the market. Jim Robb of the Livestock Marketing Information Center says there are some things out there gong on that have had an impact on these calf and yearling prices. Basically, he says, these forces finally caught up with trade this past week.
“Some of this is seasonal on the calf market. Across the US and the winter livestock auction, we were down $2 to $5 per cwt on most of the steer calves. In some of the yearling markets, we were off a little bit more. That’s a reflection I think in the short term of very muddy feedlot conditions,” Robb said. “If we look back into early fall, it seems like some region of the US cattle feeding area… we’ve just had a sequence of muddy feedyards - and that’s come to bare.”
In addition to Mother Nature’s influence on the markets, Robb says there are also some fundamental economic factors at play as well. According to Robb, cattle feeding returns for 2018 have really only had one positive month during the year, when considering total economic costs. He says all that red ink, coupled with the unfavorable weather events, has simply taken some air out of calf and yearling market and put pressure on prices. Despite these pressures, though, Robb says beef demand has held up fairly well in the marketplace, which he expects will help to offset things enough to keep markets moving at least in a sideways pattern through the winter months as the industry looks toward that renewed spring demand. Right now, he says the market seems to be correcting itself and bringing all that red ink back closer to breakeven levels. Robb adds that there is of course always the potential to see things shake out even better than expectations would lead you to believe.
“That doesn’t mean that as we get into early 2019, we can’t push up the fed cattle market,” he said. “That often happens, but we do tend to mark time as we get close to this holiday season and the cattle in the meat markets and then we look ahead to 2019 in terms of our demand profile.”
Listen to Jim Robb offer more of his insight into the current state of cattle and beef markets, with Radio Oklahoma Ag Network Farm Director Ron Hays, on today’s Beef Buzz.
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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