Marketing Chain Still Adjusting To Huge Increases In Beef Production

The cattle market has had its challenges for some time now. A fact that has been refreshed in the minds of producers lately as fedcattleexchange.com has reported prices hitting roughly $98/cwt over the last couple weeks. Frankly, that is a line we had hoped not to cross any time soon. Farm Director Ron Hays spoke with Jim Robb of the Livestock Market Information Center about how far we’ve already fallen in the cattle market and about how much further he thinks there is to go.

“Difficult to tell,” Robb said. “It’s always difficult to call a bottom whether we’re looking at the futures market or the cash market.”

Robb says prices are softer, but he insists there is more to the story. He says looking at the past week, beef production was up 25 million pounds from the same week a year ago.

“Which doesn’t seem like a whole lot,” Robb said. “But if we look back over total red meat and poultry over the last five weeks, it’s averaged up 54 million pounds every week above a year ago.”

The difficulty here has been the whole marketing chain adjusting to this huge increase in beef production, says Robb, extending all the way through to the grocery stores and restaurants. Robb suggests it takes some time for this adjustment to work its way through completely and believes it is not quite there yet.