Agricultural News
What's Causing Beef Markets to Spike? Livestock Marketing Information Center's Jim Robb Explains
Tue, 09 May 2017 11:32:07 CDT
Four weeks in a row now, producers have watched cash cattle prices climb higher, as much as $20, with the highest price levels since August 2015. Wholesale boxed beef trade also performing well lately, up over $1600 cwt last week alone, and starting this week another $2-3 cwt higher on choice and select box beef trade. Radio Oklahoma Ag Network Farm Director Ron Hays spoke with Jim Robb of the Livestock Marketing Information Center to get a handle on what is causing this unprecedented upward movement in the market.
"The reasons we've had this rally are largely tied to our marketing rate," he answered pointing to the needs of packers and a very current market situation. "The other thing we've had this year that has added on - a lot of hedged cattle this year."
Robb continued describing more or less a chain reaction in the market from the hedging that impacted the basis, causing a rally in the futures which led more cattle being sold to packers early on rather than being delayed. But Robb says patterns like this tend not to perpetuate. According to him, this feels like a spike in the market more than anything, noting that if you dig deeper, volume numbers seemed to evaporate.
"It took four or five of these factors to come together to get us here," he said. "Can they perpetuate? I think some can, but this type of percentage increase tends not to perpetuate. That doesn't mean that we're not going to still be profitable feeding cattle, but the meat market headwind I think is probably the dampening force."
Listen to Hays speak with Robb as he explains his thoughts regarding the unprecedented momentum in beef trade currently, 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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