CattleFax's Randy Blach Says Cattle Numbers Not to Blame for '15 Market Flip, More Stability ComingWed, 03 Feb 2016 15:09:08 CST
The drop in the cattle markets in the second half of 2015 wasn’t really a supply problem, at least not in terms of cattle numbers. That’s according to CattleFax CEO Randy Blach. Radio Oklahoma Ag Network Farm Director Ron Hays caught up with him last week at the Cattle Industry Convention in San Diego. A year ago, cattle supplies were tight and they stayed that way through the year as herd expansion continued in the U.S. and producers kept females out of the feedyard. In August, the cattle markets made a flip and a lot of cattle producers were put in a bad situation. From the supply side, there wasn't a lot of cattle to harvest, but there were more pounds of beef on the market, as the supply became uncurrent and the cattle were much larger at harvest. In the second half of the year, the market dealt with a lot of yield grade 4’s and 5’s and heavy weight discounts. Blach said this was one of the most uncurrent times he had seen in the last 30 years, because there was an incentive to make cattle larger, but he felt the supply forecasts were accurate.
“The numbers were right, the problem was demand and it started with global demand,” Blach said. “We ended up with a lot of quantity in our domestic markets because global demand slowed and that’s what happen when currencies move the way they did. The U.S. dollar gained 15 to 25 percent against most of these other currencies around the world, so they obviously lost a lot of purchasing power when that move occurred.”
Cattle producers have seen a lot of extremes from record prices in 2014. Blach said the cattle market got too high. In early 2015, he said the market was stretched out and it became vulnerable. By the end of the year, he said this market had gotten too low.
“So you went from one extreme to the other,” Blach said. “We should start to quiet down in here. We’re going to be in a lower range and the market is going work lower and as we move into increasing supplies over the next several years, but the volatility I think is going to start to slow down.”
Radio Oklahoma Network Farm Director Ron Hays featured Blach on the Beef Buzz feature. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
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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