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Agricultural News


Cattle Market Under Pressure as Spring Season Kicks-Off with Growing Supply Situation and Drought

Fri, 23 Mar 2018 10:41:05 CDT

Cattle Market Under Pressure as Spring Season Kicks-Off with Growing Supply Situation and Drought


As we kick-off this spring, several things seem to be pressuring the cattle markets, according to Livestock Market Economist Dr. Derrell Peel. In a recent interview, he explained some of the factors that have been impacting the price of livestock and producers’ bottom lines.


“I think we are probably seeing a seasonal component to these markets right now,” he said. “Calf prices typically peak out at this time each year. We’ve also seen these markets pull back rather abruptly, and I think there’s probably some other things going as well.”


Beyond the seasonal patterns, Peel says he has kept his eye trained on the growing supply situation unfolding right now, that has many concerned as we move towards that peak season of slaughter during May and June. He says in addition to that, carcass weights are also of concern. Peel says the futures market has started to react to this with many long positions that have strongly supported the market in recent months beginning to pull out. Compounding this scenario, is the fact that drought conditions, especially in the southwestern part of cattle country, has continued to persist. Peel rejects the idea though that significant herd liquidation will occur, but contends the next few weeks will be critical in how things play out.


“There’s a lot of general nervousness in markets right now that is really related to the macro-economic situation, specifically trade policy and that uncertainty,” Peel surmised. “And, obviously the drought continues to be a very serious situation. I think from a market standpoint it’s not eminent that we’re going to see market reaction, but it could be an impact as we go forward.”


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.



   



   

Listen to Derrell Peel explain the pressures squeezing cattle markets this spring, with Ron Hays, below
right-click to download mp3

 

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