Mike Sands - Informa Economics Breaks Down Market Volatility of Cattle Prices in 2015Tue, 24 Mar 2015 15:45:52 CDT
Cattle prices in 2014 reached record levels, which created optimism and incentive for the industry to expand. Informa Economics Senior Vice President Mike Sands said with herd expansion underway, these price levels have some downside risk. The cattle market has seen more volatility since late 2014 into the first quarter of 2015. Sands said that volatility is a function of how tight supplies are.
"As supplies have tightened up, the upside risk in the market certainly has been rather significant," Sands said. "We have posting record highs off and on since last summer - all the way across the spectrum of the cattle market. But as supplies now begin to look like at least expansion is underway, maybe we don't see a big increase in beef production this year and potentially not even a big increase next year, but the point is, there are bigger supplies coming at some point. That will give us some downside risk as we move forward."
Radio Oklahoma Network Farm Director Ron Hays caught up with Mike Sands at the Texoma Cattlemen's Conference in Ardmore Saturday. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
In January the U.S. Department of Agriculture released the annual cattle inventory report and showed the nation's producers have begun to hold back heifers and increase the size U.S. cow herd. Sands said there is no question the amount of heifer retention accelerated rather aggressively in 2014 and USDA also revised some historic numbers higher, so the industry is starting out at a higher base.
"There's not much doubt that a good bit of this early expansion is simply recovery from the drought that we saw in 2011, 2012, and 2013 and in some areas continue yet," Sands said. "But none the less, pasture and range conditions are certainly in better shape, feed costs are much lower than they were two or three years ago and the incentives to expand have built rather aggressively, along with improvement in the resource base."
Sands sees 2015 as another year of strong expansion potentially in our beef cattle business.
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.
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