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.
Click here to see more...