Fear of the Unknown Drags Prices Down as Growing Supply Situation Compounds Producers' WorryTue, 10 Apr 2018 10:09:16 CDT
Lately, it seems cattle markets have been in a bit of a funk. As producers have sat back only to watch the price of cattle continue to slip over the past several weeks, many are beginning to get concerned wondering where the bottom is. Radio Oklahoma Ag Network Farm Director Ron Hays spoke recently about the matter with Extension Livestock Market Economist Derrell Peel, who says there is a combination of things at play here that is driving markets lower - most of all the fear of the unknown, referring to mounting uncertainty in ongoing trade policy negotiations.
“Right now, the biggest trade impact you can clearly identify is just the uncertainty surrounding the situation and I guess you could say the escalating uncertainty, given what has happened recently,” Peel said. “When you add that to the fact that we’re at a time of year seasonally for fed cattle markets and for these light weight calves in particular to peak, the combination of those things is clearly putting some pressure on these markets.”
In recent months, feedlots have seen rather large placements and there are signs that cattle might be getting a bit backed up. May and June typically herald in the peak of slaughter season. So, from a supply standpoint, some in the industry are beginning to question whether or not there will be adequate demand to offset growing supplies. As the suspense builds, Peel and other economists are paying close attention to current market demand. According to Peel, domestic demand seems to be very robust at the moment with no signs of slowing down necessarily. And for the most part, export demand has performed well, too, but again the uncertainty of what current discussions may yield and what impact that will have on the future of international market access continues to be a drag on prices.
Listen to Derrell Peel and Ron Hays’ full discussion on how uncertainty in the market is affecting prices, 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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