Things Are Looking Up

Cattle prices have been making some remarkable recoveries.   Below is a 60-day Market Trendline created by The Cattle Range for June 2, 2017.   This provides a quick overview of our markets and where they might be headed.   The angle indicates direction and velocity of the trend.

In the latest CattleFax Update, Lance Zimmerman said, The most recent fed cattle cash market rally pushed from last year’s second half low at $98/cwt. to this year’s high on top of $145.   The 49 percent rally is the largest since 1979.   An entire generation of producers has been introduced to the cattle business since the last time a 12-month rally of this magnitude has taken place.”

 

Although things are looking up for cow-calf producers, we should not become complacent.   In the same article, Zimmerman said, It should not surprise anyone if a 20 percent break (drop in prices) develops in 2017.”   There appears to be a lot of volatility in the cattle markets.   It doesn’t require much to send prices higher or lower.   I don’t know of anyone who has been able to accurately predict the highs and the lows.

 

Herd expansion is still taking place – and it is taking place at a more aggressive rate than most people think.   Most of the experts believe the nation’s cowherd will continue to expand through 2018.   Some believe it will expand through 2019 if the weather cooperates (no major droughts).   This pretty much guarantees we will have near record-high beef production in the next few years – which pretty much guarantees we will have much lower calf prices.   Even though things seem to be looking up, I’m not sure we have seen the bottom of this cattle cycle.

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