Its sometimes staggering how quickly the mood of a market can change. With US cattle on feed placements being higher by 10% compared to a year ago the resulting plethora of beef to move to the market means lower prices in the short term. Canadian cattle feeders are getting the benefit of a very narrow basis historically speaking but the bearish live cattle and boxed beef market must still be a concern. With a slug of beef to move at the grocery store this summer, US grocers have no choice but to feature the product at lower prices than the first quarter of 2011 experienced. At the farm level the more concerning situation is the rising corn price which will have very scary impacts on un-hedged cattle depending on when you bought them. It will be a very interesting summer as the US fat market has already dropped from the low 120’s to 104 in a relatively short period of time.
In the episode of the Beef Market Update, Anne Dunford discusses the current bearish trend and how the market went from uber-bullish to a biting bear.
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