Market Analyst Calls for More Pragmatic Approach to Deal with Volatility Upon Revelations from GAOMon, 30 Apr 2018 11:10:52 CDT
Beef Market Analyst Glynn Tonsor recently shared his take on a report compiled by the Government Accountability Office on a study investigating what factors led to the dramatic decline in cattle prices from 2013 to 2016. According to Tonsor’s conclusion after reviewing the report, the study found no “boogeyman,” as he says, to blame as the single culprit behind this volatility. The industry had insinuated that perhaps packers were doing something inappropriate to influence the market when they requested the GAO to launch this investigation. Not to Tonsor’s surprise, the report instead suggests that a combination of drought and several variations in the dynamics of supply and demand were in fact what caused prices to fall.
“To me, it’s an example where the industry is pausing and kind of looking for somebody to blame for what has been going on,” Tonsor said. “And, while I’m not against analysis, we need to understand what is going on in markets. The cattle industry has a long history of pausing to do some of that - to find a ‘boogeyman’ at times and I’m not always sure that is productive.”
Instead of looking for someone to blame in these situations, Tonsor suggests that more could be accomplished if the different segments of the industry worked to increase cooperation among themselves - rather than taking a divide and conquer approach.
“If you synthesize this report, there isn’t a ‘boogeyman’ around the corner per se,” he continued. “That’s what the report concludes in the 2013-2016 series of why the cattle market responded the way it did and I just don’t think it’s super productive for us to keep looking for those smoking guns.”
Listen to Tonsor offer his opinions regarding this recent report out from the GAO, with Radio Oklahoma Ag Network Farm Director Ron Hays, 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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