Cattle producers have been facing a challenging economic outlook, and University of Tennessee ag economist Andrew Griffith says it could take time for things to improve.
“Producers looking to market calves over the next couple of months should not expect prices to find much footing during the fall marketing time period as the flush of cattle seasonally depresses prices, which is being further exaggerated by poor weather conditions,” he says.
Griffith says the unknowns with the corn market and some challenging weather during harvest have also provided concerns.
“A third factor negatively influencing calf and feeder cattle prices is the uncertainty in the corn market,” he says.
“Many areas of the Corn Belt have been experiencing large quantities of rainfall, which is making harvest difficult just as it made planting in spring difficult.”
It can be a challenge to find sources of optimism right now, but Griffith says there might be opportunities for people willing to take a risk, although they wouldn’t necessarily pan out.
“It is nearly impossible to pass along much positive information given the current market and production conditions,” he says.
“The big winners and big losers could be those who are willing to take a big risk and purchase calves in this depressed market.”
Feeder cattle markets also need a rally.
“Cattle that are unhedged are still deep in the red which will not change until a significant market run,” Griffith says. “It is difficult to say if there is much room for futures prices to continue escalating in October.”
When it comes to the impact of markets on management decisions, Griffith says it’s good to think long-term and not just about the next few weeks, which wouldn’t change management decisions much.
“Producers should be focused on marketing and prices during the entire production phase,” he says. “This is not a simple industry nor is it a simple market.”