Cattle Prices Take a Tumble- Resulting in Breath Taking Losses for Feedlots- Don Close ExplainsFri, 18 Sep 2015 06:41:53 CDT
Cattle prices have fallen dramatically in 2015- and all segments of the business have suffered in the downturn. Protein Analyst for Rabobank, Don Close, calls the current market "radically oversold" as he discussed the situation with Radio Oklahoma Ag Network Farm Director Ron Hays at the Kenneth and Caroline Eng McDonald Foundation Beef Symposium that is underway this week in downtown Oklahoma City.
Close was the opening speaker for the two day meeting- and he spoke to the group about how the US Beef Cow herd is being rebuilt- but will look different in the years ahead as a sizable number of cows will no longer be out on pasture 365 days a year.
In talking with Hays after his presentation- Close acknowledges that he and many of his fellow cattle market watchers have been caught by surprise as the industry has experienced the steep slide in cattle prices. Feedlot cattle, yearlings and calves have all been impacted. The Texas Cattle Feeders Association indicate in their market reports from the beginning of 2015 that slaughter cattle prices in the southern plains were flirting with the $170 per hundredweight level- as of mid September- they report slaughter steer and heifer sales at $143. Yearling prices- basis the Oklahoma National Stockyards- were quoted in a range of $225 to $236 per hundred for seven to eight hundred pounders- this compared to the sale on Monday of this week when those same weights were bringing $194 to $212.
Calf prices have dropped even more- the June first Oklahoma National Stockyard price for five to six hundred pound Medium and Large Frame 1 Steer Calves ranged from $255 to $291- this week they were quoted by USDA from $213 to $239- forty two to fifty two dollars per hundred lower.
From the top of the cattle market annually- there is often a ten to fifteen percent fallback in prices- but Close calls the more than twenty percent crash this year a "radically oversold" situation. He admits that he is not certain that the market fall is done- but he believes that history suggests that a price rebound could be coming between now and the end of the calendar year.
Close says that the profitability for feeding cattle is long gone- and that feedlot losses for 2015 could be the worst ever. He does believe the cow-calf sector will still be profitable in 2015- although it will not be nearly as good as the record breaking net prodits seen in 2013 and especially in 2014.
You can hear Ron Hays and Don Close talk about cattle price problems being seen and felt by cattle producers by clicking on the LISTEN BAR below.
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