Cattle markets are seeing mostly light cash trade as some processing facilities have slowed production. Andrew Griffith, University of Tennessee ag economist, says it has meant less need for cash cattle purchases.
“The reduction in production means there is not as much need for cash cattle purchases to fill in production holes throughout the week as many of these facilities are trying to make sure they get all of their contracted cattle processed with a limited labor resource in many instances,” he says. “What few cattle trade in the cash market will mean lower prices week-over-week which will play into lower formula prices as well.”
The situation and overall volatility of markets have been a source of frustration, Griffith says.
“The dynamics of the market are extremely interesting to say the least, and probably considered frustrating to most cattle producers who feel as if they have been taken advantage of,” he says. “This too shall end.”
The disruption of the processing chain could mean a backup in cattle and hogs.
“From a consumer perspective, there is concern about meat availability at the local grocery store while slaughter facilities are trying to manage around employee health and the agricultural producers who are supplying live animals to the facility,” Griffith says. “When slaughter levels are reduced then animals will start backing up in the feedlot or finishing barn.”
Producers will have to make some decisions about how to handle the situation and what to do with their livestock.
“This action means that cattle feeders and hog finishers have to decide what to do with these animals,” Griffith says. “Most cattle feeders will feed cattle to heavier weights until they can physically move these animals to the slaughter facility. This means pen space is not opening up which backs up feeder cattle and calves.”
Hog producers are also working through these decisions, Griffith says. Livestock producers may have to get creative and consider alternatives to their usual plans.
“From the hog side, hogs have to move off the finishing floor to make way for the next group or an alternative destination has to be found for the next group of hogs,” he says. “There are a lot of tough decisions ahead and hopefully American ingenuity can overcome some of the barriers.”