Cattle markets are looking for signs of optimism as the final weeks of the year arrive.
Andrew Griffith, Extension ag economist for the University of Tennessee, says feeder cattle prices keep going up, and beef markets could see a strong week of buying before the year ends.
“The fat cattle market continues to push higher to the delight of cattle feeders,” he says in his weekly market outlook.
“An earlier writing indicated that the market has the ability to hit $120 before the end of the year, and this week’s price movement provides more hope that a weekly average price will actually hit that mark. The December live cattle futures contract is pricing cattle at $121 before the end of the year, but it would still be a great feat to hit the $120 mark before the new year.”
However, Griffith says markets always have some uncertainty.
“The market could just as easily stall the next several weeks, but it is likely that some late holiday beef buying will keep packers hungry for cattle which will provide feedlot managers with a little leverage,” he says. “A price of $120 sounds good right now, but $130 or higher next spring sounds better.”
Griffith and other analysts will be watching the holiday beef buying trends.
“The Thanksgiving holiday-shortened production week supported beef cutout prices to some extent, but the softer prices provide some confirmation that end-of-the-year holiday beef buying is complete for most in the market place,” he says.
“It is likely that the beef market will see a week of frenzied buying during the first few weeks of December, but that will provide the last rally of the year. There is a good chance that retailers will support prices for a short period after the first of the year while they restock the meat counter.”
Feeder cattle futures heading into next year are higher, and Griffith says it looks like 2020 will see higher prices than this year has had. It might not be a huge improvement, he says, but overall the outlook looks better than what cattle producers have been facing.