Cattle prices have had a rough couple years as they fell in response to carcass weights getting too heavy in 2015 and then again this year, not just because of beef supplies but also pork supplies as well. Jim Robb of the Livestock Marketing Information Center tells Farm Director Ron Hays that it has been the combination of the two red meat supplies that has overwhelmed the markets.
“We’ve looked back over the last seven or eight weeks and we’ve had kind of a mountain of red meat in the marketplace and overall, the markets have struggled to deal with that as we work through the whole supply chain,” Robb said. “It’s been a challenge for retailers and everybody.”
Robb reports that on average, the meat market has had roughly seven to eight percent increases year over year that have been split fairly evenly between beef and pork. The latest reports though, says Robb, show an eight percent increase in beef alone and a more modest three percent increase in pork. This he says is causing the supply chain to struggle even more in attempting to keep up with moving this amount of tonnage through the system.
“Seems like we’re adapting to that and I think that’s part of what’s happened in the last week or two in terms of the stabilization of prices,” Robb said, attributing this to the marketing chain dealing with the reality of the situation. “Now, is that tonnage sustainable? I think that’s an important question.”
Based on current cattle on feed inventories, Robb’s best guess to that question, is that this current tonnage is not sustainable moving into next year. He believes the market will continue to see year over year increases of up to four or five percent, but will likely not reach the levels experienced this year. He says though that amount of tonnage is still a dramatic increase and that exports will become an important channel in finding a home for the excess product.
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