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Cattle Markets Struggling to Find Stable Footing Amid Overwhelming Supplies

by Ken Root

Profit Maters 10-12

The market for cattle has been falling for a couple of years. Producers consider that to be bad as their profitability is pretty much gone at this time.

The price of beef is coming down and consumers like that. Beef was so expensive a few years ago that many people thought they may never eat another steak.

Now, the market seems to be close to a bottom for beef, and cattle producers are hoping to see an uptrend in the value of their livestock.

Dr. Darrell Peel is a livestock marketing economist at OSU. It has been a tough few weeks for the livestock marketplace, including sectors across the board from cattle futures to slaughters and yearlings to stockers. Farm Director Ron Hays spoke recently to Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel to find out why the market has been behaving the way it has been. Dr. Peel says he believes the markets are really just looking for some stability.

“This market has been kind of under a shadow the last few weeks. We had a lot of supply thrown at the market,” Peel said. “It’s been looking for a bottom.”

According to Dr. Peel, the markets are working on a very short-term basis and believes we are passed or at least moving passed the recent supply pressure. “I think this market is trying to find some footing – it’s trying to consolidate a little bit,” Peel said. “Hasn’t really put that all together yet. So we haven’t seen a lot of change. I think it’s just treading water right now.”

Things don’t look any better on beef’s end either. Although Dr. Peel says a lot of meat has been moved through the market lately, he says the market is still flooded with meat supplies; not just with beef but pork and poultry as well. This makes it difficult to read any signs of improvement.

Despite all this, Dr. Peel asserts that the market is more or less holding its own and doing as well as could be expected when all things are considered. Looking at the big picture though, he does say that the overall market is improving, as exports are up and imports are down.

“I think it’s pretty basic market fundamentals. Obviously, we’re coming down from record high prices, wholesale beef prices have dropped significantly,” Peel said. “So the net picture for the beef trade for the US is definitely improving.”

Thanks to Ron Hays of the Rural Oklahoma Network for providing this interview with Dr. Derrell Peel