One of the questions on every producers mind is, “How long can these prices continue?” Looking at the demand side, we don’t see any real indication beside the seasonal dips that regularly occur. On the skeptical side however, whenever we have an extended run like this we have a tendency to wait for the other shoe to fall. It’s not exactly a scientific approach, but its pretty common among farmers. With those continued highs come continued tight margins. High break-evens and wild market swings make risk management an absolutely critical element for producers to incorporate.
Many feedyards are buying feeders at a $125 – $130 breakeven which is causing some higher stress levels. If the spring highs are in and the market floats lower through the summer a large question springs to mind. Will the fall market be at the same highs as the spring market?
As for the cow-calf producer, is there anything that can rain on their parade? What factors could influence a drop in that market?
In this episode of the Beef Market Update, Anne and Shaun talk about the trajectory of the current market, the ups and downs as well as the potential for fall highs.
If you cannot see the embedded video below click here.