This week was a bit of a wild ride in the markets following the JBS fire that occured in Granville Island, Nebraska.
The plant — that has the capacity to process 6,000 head of cattle a day — is now back up and running, but it has many asking “how does this impact the cattle market?”
Anne Wasko of the Gateway Livestock Exchange says that due to the size of the plant, markets certainly reacted, and they reacted quickly. Also, it’s a reminder of how sensitive the markets are in terms of what’s happening to that supply channel.
“In all those uncertainties — whether it’s a fire, or any of the various things that tend to pop up in the last couple of years — the market doesn’t like those uncertainties. Of course, the futures market traded significantly lower on Monday, but recovery here as we speak later in the week has come around. They are back operating, and it was a short term impact to that supply,” Wasko explains, adding the harvest challenges talked about from COVID-19, and the Tyson plant fire from the fall of 2019 had much more long-term impacts.
Whenever these kinds of things happen, Wasko says it really highlights the disconnect between what happens in the processing side, and what happens on the producer side.
“You have a shortage of production, wholesale prices go up, and cattle prices go the other way. So that’s unfortunately what we’re learning — and have been well aware of for some time — is there is a pretty big disconnect, and we see it highlighted here,” she explains.
Check out a market recap with Anne Wasko and RealAgriculture’s Lyndsey Smith, below:
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