Ugly Cattle Markets That Could Get Uglier- Jim MIntert of K-State at the Cattle Industry ConventionFri, 30 Jan 2009 13:51:46 CST
It's an ugly cattle market and could get uglier in the days to come- so says Kansas State University Extension Livestock Market Economist Dr. Jim Mintert, who spoke to producers here in Phoenix at the Cattle Industry Convention.
Mintert says that he agrees with other analysts who point to one of the factors in falling cattle prices in recent months being the so called "drop credit." He is dubious about any significant recovery in the drop credit quickly, especially with the depressed state of the auto industry taking away a major market for leather that is used for car seats.
Mintert says for cow-calf and stocker operators that falling prices the balance of 2009 is a very real possibility with the huge losses that cattle feedlots are suffering for their closeouts of pens of cattle that are being sold right now in the low 80s. Here at the Cattle Industry Convention- we have heard operators that had risk management in place brag about losing only $75 or $80 per head- while others with less of a safety net admitting they had closeouts with losses at or slightly above $300 per head, at the worst.
Mintert says with those losses and the draining of equity that is a reality for the feedlots- something will have to give fairly soon- either higher cash cattle prices or cheaper price levels for feedlot ready cattle.
Click on the listen bar below to listen to our "market" conversation with Dr. Jim Mintert.
Ron Hays talks with Jim Mintert about the cattle markets
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